Correction: credit card minimum payment model
Corrected how the credit card payoff calculator models the minimum payment. It previously used a flat 2 percent of the balance, which overstated payoff time; it now uses the representative issuer method of 1 percent of the balance plus that month's interest, with a floor.
Our credit card payoff calculator modeled the monthly minimum as a flat 2 percent of the balance. That is not how most major issuers set the minimum, and it overstated how long payoff takes. We corrected it to the representative method: the greater of 1 percent of the balance plus that month’s interest, or a fixed floor.
We updated the calculator default, the worked example in the credit card minimum payment trap playbook, and the methodology to match, so the figures you see now reflect the corrected model.
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