How to use the credit card payoff calculator
- Enter your card balance and purchase APR from your statement.
- Set the minimum payment rule from your card agreement: a percentage of the balance plus interest, a percentage of the balance, or a fixed amount, with any dollar floor.
- Enter the fixed monthly payment you plan to make, or the number of months you want to be debt-free in.
- Compare the payoff time and interest for minimum payments and your plan.
Worked example
$5,000 at 22% APR: minimum of 1% + interest (at least $25) vs $250 a month
The first minimum payment is $141.67, and because it shrinks with the balance, paying only the minimum takes 230 months (19 years 2 months) and costs $8,099.76 in interest. Paying $250 a month clears the card in 26 months with $1,285.71 of interest.
How it works
Month by month: interest = balance × APR ÷ 12, rounded to the cent. The minimum payment is recalculated each month from your rule (for example 1% of the balance plus that month’s interest, but at least the floor), capped at the remaining balance. If a payment does not exceed the month’s interest, the balance never falls and the calculator reports that it never pays off. For a target payoff time the payment is the level payment P × r / (1 − (1 + r)−n), rounded up to the cent.
Assumptions
- No new purchases, fees or rate changes during payoff.
- Interest is modelled monthly at APR ÷ 12; issuers often compound daily, which costs slightly more.
- The APR and minimum rule are values you enter from your own card terms.
Frequently asked questions
Why do minimum payments take so long?
Minimums usually fall as the balance falls, so most of each payment goes to interest for years. A fixed payment keeps the same amount going to the card and clears it much faster.
What if my payment is less than the interest?
The balance will never go down. The calculator warns you and shows how much the monthly interest is so you can choose a higher payment.
Should I also look at a balance transfer?
A 0% or low-rate balance transfer can help, but transfer fees and the rate after the promotion matter. You can compare using the debt consolidation calculator.
Limitations
- Does not model promotional rates, cash advance rates, late fees or daily compounding exactly.
- Card issuers’ minimum payment formulas vary; check yours.