Why so many borrowers are stuck making minimum payments on their debts

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By

Angelica Leicht

Senior Editor, Managing Your Money

Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.

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October 28, 2026 / 12:33 PM EDT / CBS News

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Making your monthly debt payments on time should equate to making progress with paying off what you owe. It's not uncommon, though, particularly with certain types of debts — like high-rate credit card debt — to check your balances after months of consistent payments and find that you still owe nearly as much as you started with. That can make it difficult to see a way forward. 

And for many borrowers, that's precisely what's happening right now, and a recent study from Freedom Debt Relief illustrates how widespread the problem has become. Of the 1,800 borrowers surveyed who are carrying at least $10,000 in unsecured debt, 28% report being able to afford only the minimum required payments. Another 20% say they are already behind on at least one account.

What's particularly concerning is that many of these borrowers are already making significant financial sacrifices to stay current on their payments. They're cutting discretionary spending, adjusting budgets and looking for ways to reduce what they owe, yet progress remains elusive. So, what's keeping so many borrowers trapped in the minimum-payment cycle and how can they break free? That's what we'll examine below.

Learn about the help Freedom Debt Relief can offer you here.

Why so many borrowers are stuck making minimum payments on their debts

Several financial pressures can make minimum payments the only manageable option, even for borrowers who are actively trying to eliminate their debt. Here's what's at play currently:

High interest rates consume much of each payment

One of the biggest obstacles is the interest accumulating on outstanding balances. Credit cards generally charge interest daily, and when the average annual percentage rates (APRs) on credit cards exceed 22%, as they do currently, those charges can quickly absorb a substantial portion of each payment.

When you're carrying a large credit card balance month after month at a high interest rate, a substantial portion of each minimum payment goes toward the interest charges rather than reducing what you owe. That means you could make payments every month, potentially paying thousands of dollars over time, without making a real dent in the principal balance.

Find out how Freedom Debt Relief can help with your debt today.

Everyday expenses leave little room for extra payments

For many households, making larger debt payments isn't simply a matter of eliminating unnecessary purchases. Essential expenses, including housing, groceries, utilities and insurance, can consume most of their available income. Freedom Debt Relief's study underscores this challenge. 

Among study respondents, 41% reported cutting restaurant meals or food delivery, while 40% eliminated nonessential online shopping. Another 35% switched to generic groceries and household products. These findings suggest that some heavily indebted borrowers have already reduced flexible expenses without freeing up enough money to substantially accelerate the repayment process.

Multiple balances stretch borrowers' budgets

Managing one expensive debt can be challenging. Managing several costly debts simultaneously can make the repayment process significantly more difficult, and a lot of borrowers are carrying more than one debt currently. Case in point? About two-thirds of respondents in the Freedom Debt Relief study owed money on at least three accounts, while approximately one-third had five or more outstanding accounts. 

The main issue is that each account carries its own minimum payment, interest charges and due date. Collectively, those obligations can consume hundreds or thousands of dollars monthly before borrowers can make additional payments toward any individual balance, stretching borrowers' budgets thin and leaving little room for more than the minimums.

Unexpected expenses can erase repayment progress

Even borrowers who manage to pay more than the minimum occasionally may struggle to maintain that momentum. An unexpected medical bill, vehicle repair or temporary reduction in income can force someone to redirect money earmarked for debt repayment. Without emergency savings, they may also need to borrow again to cover the expense. The result can be a frustrating cycle in which borrowers repeatedly pay down balances only to rebuild them when another expense arises.

How to break free from the minimum payment cycle

If you're struggling to make progress on your debts, changing your repayment strategy may be more effective than continuing to make increasingly difficult budget cuts. Here's what to consider: 

Look for opportunities to reduce interest costs

Contact your credit card issuers and ask whether you qualify for a lower APR or hardship assistance. Some creditors offer temporary rate reductions or structured repayment arrangements. You could also consider moving your debt to a balance transfer card with a 0% introductory APR or paying it off with a lower-rate debt consolidation loan. However, you'll want to compare transfer fees, repayment deadlines and total borrowing costs before committing.

Make targeted extra payments

If you can afford even a modest amount above your combined minimum payments, it could make sense to direct it toward one account rather than spreading it across multiple balances. The debt avalanche method prioritizes the highest-rate balance, potentially saving the most money. The debt snowball method targets the smallest balance first, providing quicker repayment milestones. Whichever approach you choose, though, be sure to continue making the required minimum payments on your other accounts.

Explore structured debt repayment assistance

If your budget cannot accommodate more than minimum payments, a credit counseling agency or a reputable debt relief company may be able to help you establish a plan to get out of debt. Those strategies often include options like debt management and debt settlement, both of which can save you money on your debt and expedite the repayment process, but you'll want to carefully weigh both the benefits and the consequences of each option before making any decisions.

The bottom line

Making minimum payments can protect your accounts from becoming delinquent, but it doesn't necessarily put you on a realistic path toward becoming debt-free. If your balances aren't declining despite consistent payments and spending reductions, evaluate whether high interest charges, multiple obligations or insufficient cash flow are the underlying obstacles. Addressing those problems directly may do more to improve your financial position than continuing to stretch an already strained budget.

Edited by Matt Richardson