How credit card payoff is calculated
Each month, interest of APR ÷ 12 is added to the balance and your payment is taken off. The calculator repeats that month by month until the balance reaches zero, the same way your statement works.
Example: a $5,000 balance at 22% APR, paid at $200 a month with no new spending, takes 2 years and 10 months (34 payments) and costs about $1,750 in interest. The first month alone adds $91.67 of interest. To clear it in 24 months instead, you'd pay about $259.39 a month and save about $525 in interest.
Ways to pay it off faster
- Pay more than the minimum. Minimums are often only interest plus 1% of the balance, which can stretch a payoff over decades.
- Avalanche: with several cards, put extra money on the highest APR first. It costs the least interest.
- Snowball: clear the smallest balance first for a quick win, then roll that payment into the next.
- Balance transfer: a 0% offer stops interest for a while, but check the transfer fee, usually 3% to 5%.
Real statements calculate interest on your average daily balance, so results can differ by a few dollars.
How the payment changes the payoff
A $5,000 balance at 22% APR, with no new purchases:
| Monthly payment | Time to pay off | Total interest |
|---|---|---|
| $125 | 6 yr 1 mo (73 payments) | $4,095 |
| $150 | 4 yr 4 mo (52 payments) | $2,798 |
| $200 | 2 yr 10 mo (34 payments) | $1,750 |
| $250 | 2 yr 2 mo (26 payments) | $1,286 |
| $300 | 1 yr 9 mo (21 payments) | $1,022 |
| $500 | 1 yr (12 payments) | $574 |
Raising the payment from $125 to $250 cuts about $2,809 of interest and finishes 3 yr 11 mo sooner. Any payment at or below the monthly interest, about $92 here, never clears the balance.
Frequently asked questions
How long will it take to pay off my credit card?
Enter your balance, APR and monthly payment. For example, $3,000 at 24% APR with $150 a month takes 2 years and 2 months (26 payments).
What payment do I need to pay off a credit card in a year?
Switch to "I want to be debt-free in…" and enter 12 months. $3,000 at 24% APR needs about $283.68 a month.
Why doesn't my balance go down?
If your payment is close to the interest added each month, almost all of it goes to interest. Each month adds about Balance × APR ÷ 12.
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