Credit Card Payoff Calculator
Find out how long it will take to pay off your credit card balance.
The High Cost of Minimum Payments
Credit card debt is a trap designed to keep you paying. High interest rates, often 20-40% annually, mean that making only the minimum payment can keep you in debt for decades, causing you to pay back many times what you originally borrowed. This calculator shows you the truth. It reveals exactly how long it will take to clear your balance and, more importantly, how much you'll waste on interest. Use it to create a real plan to get out of debt faster.
How to Create Your Payoff Plan
To see your debt-free date, you'll need a few numbers from your credit card statement:
- Credit Card Balance: The total amount you currently owe.
- Annual Percentage Rate (APR): The yearly interest rate your card charges. This is the most important number.
- Monthly Payment: The amount you plan to pay each month. Enter a number higher than your minimum payment to see a real impact.
The calculator will show you how many months it will take to be debt-free and the total interest you'll pay. Try increasing the monthly payment to see how much money and time you can save.
Frequently Asked Questions (FAQ)
Q: Why is paying only the minimum so bad?
A: The minimum payment is intentionally set low, often just enough to cover the interest for that month and a tiny fraction of the principal. This means the bulk of your payment is just feeding the bank, not reducing your debt, a cycle known as amortization.
Q: What's a better strategy? The debt snowball or debt avalanche?
A: The "avalanche" method (paying off the highest-interest card first) is mathematically the fastest way to get out of debt and saves the most money. The "snowball" method (paying off the smallest balance first) can provide psychological wins that keep you motivated. Both are vastly superior to making minimum payments.