How to use the credit card calculator
Enter the card balance and its APR, then choose how to plan the payoff. With Set payment, enter what you can pay each month, or use a quick pick based on the balance, to see how long it takes and how much interest it costs. With Set payoff time, enter when you want to be debt free to see the monthly payment you need. Both show a month-by-month payoff schedule.
How credit card interest works
Credit cards charge interest on the balance you carry from month to month. The monthly rate is the APR ÷ 12, so at 22.36% APR a $8,000.00 balance costs $149.07 of interest in the first month. Every payment covers that interest first, and only the rest lowers the balance. A payment at or below the first month's interest never pays the card off.
Credit card payoff formula
With a fixed payment M, a balance B and a monthly rate r = APR ÷ 12, the number of months is n = −ln(1 − B × r ÷ M) ÷ ln(1 + r). To be debt free in n months, the payment is M = B × r ÷ (1 − (1 + r)−n).
Credit card calculator example
Paying $200.00 a month on $8,000.00 at 22.36% APR takes 6 years and 3 months and costs $6,817.57 of interest. To clear the same balance in 2 years, you need $416.45 a month and pay $1,994.77 of interest, $4,822.80 less.
Payoff time by monthly payment
| Fixed payment | Per month | Time to pay off | Total interest |
|---|---|---|---|
| Interest + 1% of the balance | $229.07 | 4 years and 9 months | $5,052.59 |
| 2% of the balance | $160.00 | 12 years and 2 months | $15,255.36 |
| 3% of the balance | $240.00 | 4 years and 5 months | $4,616.44 |
| 4% of the balance | $320.00 | 2 years and 10 months | $2,868.63 |
| 5% of the balance | $400.00 | 2 years and 2 months | $2,102.50 |
For $8,000.00 at 22.36% APR, paying the same amount every month until the card is paid off. These are the quick picks of the calculator.
Monthly payment to be debt free by a date
| Pay off in | Monthly payment | Total interest |
|---|---|---|
| 1 year | $750.14 | $1,001.70 |
| 2 years | $416.45 | $1,994.77 |
| 3 years | $307.02 | $3,052.56 |
| 5 years | $222.59 | $5,355.51 |
Why the minimum payment costs so much
Card issuers usually set the minimum at the month's interest plus 1% of the balance, or 2% to 3% of the balance. The minimum shrinks as the balance does, so paying only the minimum takes even longer than the fixed payments in the table above. Keeping the payment fixed at the first minimum, or higher, clears the card far sooner.
Credit card payoff in Excel
- Months to pay off:
=NPER(22.36%/12,-200,8000), rounded up, returns 75. - Payment to pay off in 2 years:
=PMT(22.36%/12,24,-8000)returns $416.45.
Ways to pay less interest
- Pay more than the minimum, and pay the card with the highest rate first (the avalanche method).
- Move the balance to a card with a 0% intro APR; the transfer fee is usually 3% to 5%.
- A personal loan at a lower rate can replace several card balances with one fixed payment.
- Stop adding new charges while you pay the balance down, or pay new purchases in full each month.
Related calculators
With several cards, the credit cards payoff calculator splits one monthly budget between them, and the debt payoff calculator adds loans to the plan. To see whether a lower-rate loan beats your cards, use the debt consolidation calculator.