How payoff time is calculated
Each month, interest is added (balance × APR ÷ 12) and your payment is subtracted. The calculator repeats this month by month until the balance reaches zero, then adds up the interest. For a target date, it uses the amortization formula to find the fixed payment that clears the balance on time.
B is the balance, P the monthly payment and r the monthly rate. If the payment is not larger than the first month’s interest (r × B), the balance never goes down.
Fastest ways to pay off credit card debt
- Stop adding new charges to the card you are paying down.
- Pay a fixed amount rather than the shrinking minimum.
- Ask for a lower APR. Issuers sometimes agree, especially if you have a good payment history.
- Consider a consolidation loan at a lower fixed rate — compare using the loan calculator.
How to use the calculator
- Enter your current balance and the card’s APR (on your statement).
- Choose whether to enter a fixed monthly payment or a target number of months to be debt-free.
- Read how long payoff will take, the total interest and the payment needed to finish by your target date. Assumes no new purchases.
How payment size changes payoff
| Monthly payment ($6,000 at 22%) | Time to pay off | Total interest |
|---|---|---|
| $150 | 73 months | $4,913 |
| $200 | 44 months | $2,791 |
| $250 | 32 months | $1,979 |
| $300 | 26 months | $1,543 |
| $400 | 18 months | $1,081 |
| $500 | 14 months | $839 |
Doubling the payment from $250 to $500 cuts the time by more than half and saves well over $1,000 in interest.
The minimum payment trap
Card issuers typically set the minimum payment at around 1–3% of the balance plus interest, or a small fixed amount. Because the minimum falls as the balance falls, paying only the minimum can stretch repayment over many years and cost more in interest than the original balance. U.S. statements must show how long payoff will take at the minimum and the payment needed to pay off in three years, under the CARD Act.
Strategies for several cards
- Avalanche: pay minimums on all cards and put every extra dollar toward the highest-APR card. This saves the most interest.
- Snowball: put extra money toward the smallest balance first. It costs a little more in interest, but quick wins help many people stay motivated.
- Balance transfer: a 0% intro APR card can save a lot if you can repay within the promotional period. Transfer fees are usually 3–5%, and the rate jumps afterwards.
- Personal loan consolidation: a fixed-rate loan with a lower APR and a fixed end date can help — as long as the cards don’t fill up again.
How credit card interest is charged
Most cards charge interest daily: APR ÷ 365 × the average daily balance, added monthly. If you pay the full statement balance by the due date, you usually pay no interest on purchases thanks to the grace period. Once you carry a balance, new purchases often start accruing interest immediately until the balance is fully paid. Paying down your balance also lowers your credit utilization, which can improve your credit score.