Credit Card Payoff Calculator

What each input means

• Card balance: what you owe today, from your latest statement.
• APR: the annual percentage rate on purchases shown on your statement. One-twelfth of it is applied each month.
• Fixed monthly payment: what you plan to pay every month. It must be more than the month's interest for the balance to go down.
• Alternative payment: an optional second amount, to see how much time and interest you save by paying more.
• Months to pay off: in the other mode, the number of months you want to be debt-free in.
• First payment date: optional; used to estimate the month of your final payment.

How the payoff is calculated

i = APR ÷ 12
Monthly interest = Balance × i
New balance = Balance + Interest − Payment
Months ≈ −ln(1 − i × Balance ÷ Payment) ÷ ln(1 + i)

If your payment is equal to or less than the first month's interest (Balance × i), the balance never goes down and the card is never paid off. To pay it off in N months, the calculator uses the fixed-payment formula: Payment = Balance × i ÷ (1 − (1 + i)^−N).

How to read the results

• Months to pay off: how many payments you need, including a smaller final payment.
• Total interest: what it costs to carry the balance until it reaches zero.
• Never paid off: your payment doesn't cover the interest, or payoff would take more than 100 years. You'll see the smallest payment that starts reducing the balance and the payment needed to finish in 5 years.

Paying just a little more than the interest keeps you in debt for years. Even a modest increase in your payment cuts the time and the interest dramatically.

Fixed payment vs. minimum payment

Your statement's minimum payment is usually a small percentage of the balance plus interest, so it shrinks as the balance falls and stretches the payoff out much longer. This calculator assumes you keep paying the same fixed amount every month, which is one of the simplest ways to get out of credit card debt faster.

Card issuers typically calculate interest on your average daily balance, so your statement may differ slightly from this monthly estimate.

When to use it

• To check whether your current monthly payment is actually reducing your debt.
• To figure out how much to pay each month to be debt-free by a specific date.
• To compare paying down the card with other options, such as a lower-rate loan or a balance transfer.

Example

A card with a $5,000 balance at 24% APR (2% a month). Paying $250 a month, you pay it off in 26 months and pay $1,449.36 in interest. In the first month, $100 of your payment is interest and only $150 reduces the balance. At $100 a month or less, the balance would never go down.

1. i = 24% ÷ 12 = 2% per month
2. First month's interest = $5,000 × 0.02 = $100
3. Months = −ln(1 − 0.02 × 5,000 ÷ 250) ÷ ln(1.02) ≈ 25.8, so 26 payments
4. To pay it off in 12 months: 5,000 × 0.02 ÷ (1 − 1.02^−12) = $472.80 a month, $673.58 in interest

Common mistakes

• Assuming the minimum payment will clear the balance quickly. It often covers little more than the interest.
• Continuing to use the card while paying it down, so the balance keeps growing.
• Entering the monthly rate in the APR field, or the other way around.
• Forgetting that a promotional 0% APR ends: once the regular APR kicks in, the payoff time changes.
• Ignoring late fees and annual fees that some issuers add to the balance.