Quick answer: Each month the card charges interest of balance × APR ÷ 12, and your payment is taken off what is owed. Paying $200 a month on a $5,000 balance at 22% APR clears the card in 2 years and 10 months and costs $1,749.88 in interest, while paying $300 a month clears it in 1 year and 9 months and costs $1,021.60.
Credit card interest is expensive, and paying only the minimum can keep you in debt for years. Seeing the real numbers is often the push people need to pay a little more each month.
Use it two ways. Enter a payment you can afford and see how long it takes and what the interest costs. Or pick a target, such as two years, and see the payment you would need. Try a few payments: small increases can save a surprising amount.
How the payoff is worked out
Each month, interest is charged on the remaining balance at one twelfth of the yearly rate, and then your payment is taken off. The calculator repeats this until the balance reaches zero.
New balance = balance + interest − payment
Payment for a target of n months = B × r ÷ (1 − (1 + r)−n) (r = APR ÷ 12)
If your payment is no more than the monthly interest, the balance never falls, and the calculator will tell you so. It assumes no new purchases and a fixed rate. Real cards may charge interest daily or change rates, so treat the result as a close estimate.
A worked example
Example. A $5,000 balance at 22% APR paid off with $200 a month takes 2 years 10 months and costs $1,749.88 in interest. Raising the payment to $300 a month cuts it to 1 year 9 months and the interest to $1,021.60, saving $728.28.
How the monthly payment changes the cost
| Monthly payment | Time to pay off | Total interest | Total paid |
|---|---|---|---|
| $150 | 4 years 4 months | $2,798.05 | $7,798.05 |
| $200 | 2 years 10 months | $1,749.88 | $6,749.88 |
| $300 | 1 year 9 months | $1,021.60 | $6,021.60 |
| $500 | 1 year | $574.44 | $5,574.44 |
$5,000 balance at 22% APR with no new purchases. Doubling the payment from $150 to $300 cuts the interest by more than half.
Common mistakes to avoid
- Paying only the minimum. It is often close to the monthly interest, so the balance shrinks very slowly and the interest adds up.
- Adding new purchases while paying off. The calculator assumes none, so new spending pushes the payoff date back.
- Ignoring a lower-rate option. Moving a balance to a card with a lower rate, or a personal loan, can cut the interest if fees are small.
Go deeper: read our guide How Loan Payments Are Calculated, With Examples.
Frequently asked questions
What happens if I only pay the minimum?
The minimum is often set close to the interest plus a small amount of principal, so the balance falls very slowly. Enter your minimum payment above to see how many years it would take and how much interest you would pay.
Should I pay off the highest interest card first?
Paying the card with the highest APR first, known as the avalanche method, saves the most interest. Paying the smallest balance first, the snowball method, gives quicker wins and works for some people. Both beat paying only minimums.
Is the APR the same as the interest rate?
For credit cards they are usually very close. Enter the APR shown on your statement.
Why is my statement slightly different?
Card issuers often calculate interest daily on the average balance, and may include fees or promotional rates. This tool uses a simple monthly model, so expect small differences.
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Sources and further reading
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