Credit Card Payoff Calculator
Discover the true cost of credit card debt. Compare paying only the minimum payment against paying a fixed monthly amount to see exactly how many months it takes to pay off your balance and how much interest you save. The difference is often shocking.
This calculator provides estimates for general informational purposes only and does not constitute financial advice. Consult a qualified financial professional before making any financial decisions.
How It Works
Credit cards use a revolving balance structure. Interest accrues daily at APR ÷ 365, but this calculator uses monthly compounding (APR ÷ 12) which produces very close results.
Monthly interest = balance × (APR / 12 / 100)
New balance = balance + monthly interest − payment
Minimum payment trap: Many cards set the minimum payment as 2% of the balance (or $25, whichever is greater). As the balance falls, the minimum payment shrinks — meaning you pay less and less each month, which dramatically extends the payoff period.
Fixed payment: Keeping the payment constant accelerates payoff significantly.
Worked example: $5,000 balance, 22% APR.
Monthly rate = 22/12/100 = 0.01833
Minimum payment (2% of balance):
Month 1: Min = max(5000×0.02, 25) = $100; Interest = $91.67; Principal = $8.33; New balance = $4,991.67
...This continues for approximately 30+ years, costing over $7,000 in interest.
Fixed payment of $200/month:
Month 1: Interest = $91.67; Principal = $108.33; New balance = $4,891.67
Pays off in about 32 months, total interest ≈ $1,350 — saving roughly $5,650 vs minimum payments.
Frequently Asked Questions
Why does paying the minimum take so long?
Because the minimum payment is typically a percentage of your balance, it shrinks as you pay down the debt. Meanwhile interest keeps compounding. You end up paying less and less each month while interest eats up most of your payment — the payoff timeline stretches to decades.
What is the minimum payment percentage typically?
Most credit cards set the minimum at 1–2% of the outstanding balance or $25, whichever is greater. Some cards use a flat $35 minimum. Check your statement or cardholder agreement for your specific terms.
How much should I pay each month to get out of debt fast?
A common rule of thumb is to pay at least 3–5% of your balance each month. Better still, pick a fixed dollar amount you can sustain and stick to it. Even paying $50 more per month than the minimum can save thousands in interest and years of debt.
Does the APR change when I pay down the balance?
No — the APR stays the same. However, the dollar amount of interest falls as the balance decreases. Paying a fixed amount accelerates this decline significantly.
Should I pay off credit cards before saving?
Generally yes, if your credit card APR exceeds the after-tax return on your savings. A 22% APR card paid off is equivalent to earning 22% risk-free — unbeatable by any savings account or most investments. Build a small emergency fund first, then attack high-rate debt aggressively.