Credit Card Payoff Calculator

How credit card interest works

Credit cards quote an annual percentage rate (APR), but interest is charged monthly on the balance you carry. The monthly rate is roughly the APR divided by 12: a 22% APR is about 1.83% per month. On a 5,000 balance that is about 91.67 of interest in the first month, so if you pay 200, only about 108 actually reduces the debt. As the balance falls, less of each payment goes to interest and more to the balance.

months = −ln(1 − r × balance ÷ payment) ÷ ln(1 + r),   where r = APR ÷ 12 ÷ 100

The calculator does not rely on the formula alone: it steps through every month, rounding interest to the cent like a statement, and adds up the total interest. It assumes no new purchases, no fees and a fixed APR; real statements may differ slightly because many issuers calculate interest on the average daily balance.

Worked examples (5,000 balance at 22% APR)

The first row shows the trap: paying 100 a month, barely above the 91.67 interest charge, means you repay the 5,000 plus more than 8,600 of interest over 11 years. Raising the payment from 100 to 200 cuts the time by about 9 years and saves almost 7,000.

Working the other way round, to clear the same 5,000 in 24 months you need about 259.40 per month (rounded up to the cent so the last payment clears the balance); in 12 months, 467.98; in 36 months, 190.96.

Minimum payments

Card issuers set a minimum payment, often a small percentage of the balance (commonly around 1–3%) plus interest, or a fixed floor amount. Because it shrinks as the balance shrinks, paying only the minimum can stretch repayment over decades. Many countries now require statements to show how long minimum-only payments would take; in the US this "minimum payment warning" comes from the Credit CARD Act of 2009. The simplest protection is to pay a fixed amount that does not fall as the balance falls, which is exactly what this calculator models.

Ways to pay off cards faster

• Stop adding to the balance. New purchases on a card with a carried balance usually start accruing interest immediately.
• Avalanche method: pay the minimum on every card and put every extra amount on the card with the highest APR. This minimises total interest.
• Snowball method: put extra money on the smallest balance first. It costs a little more interest but clears whole cards sooner, which keeps many people motivated.
• Balance transfer at 0%: moving 3,000 to a card with an 18-month 0% offer means 166.67 a month clears it before interest starts, but check the transfer fee (often 3–5%) and the rate after the offer ends.
• Consolidation loan: a personal loan at a lower fixed rate can replace card debt. Compare the total cost with the loan calculator.
• Pay more than once a month if your card calculates interest on the daily balance; smaller, earlier payments reduce the average balance.

Common mistakes

• Payment at or below the monthly interest. If the payment does not exceed the first month's interest, the balance never falls. The calculator warns you when this happens.
• Using the monthly rate as the APR. Enter the yearly APR from your statement, not the monthly figure.
• Ignoring promotional periods. If part of the balance is on a 0% offer, calculate that part separately.

For how interest grows when it works in your favour instead, see the compound interest calculator, and to plan an emergency fund so you need the card less, the savings goal calculator.

This calculator is for general information and does not take into account fees, changing rates or your card's exact interest method. Check your statement or ask your card issuer for exact figures.

Frequently asked questions

Sources

• Consumer Financial Protection Bureau (CFPB). What is a credit card interest rate? What does APR mean?
• Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, Pub. L. 111-24, minimum payment disclosure.

Last reviewed 14 October 2026. Results are estimates; see our disclaimer.