Credit Card Payoff Calculator

How to use this tool

Enter the balance on the card and its APR, then either the amount you can pay each month or the number of months you want to clear it in. The result shows how long it takes or what to pay, the interest you will pay, the total repaid and a month by month chart of the balance. The minimum payment boxes let you enter your card's formula so the tool can show what paying only the minimum would cost by comparison.

The input people most often get wrong is the rate. Use the purchase APR from your statement, not the rate on cash advances or balance transfers, and if part of the balance is on a promotional rate, run that part separately. The APR is a yearly figure; the card charges a twelfth of it each month.

What the calculation is doing

Each month the card adds interest on what you owe and then takes off your payment. At 22% APR the monthly rate is 1.8333%, so on a $5,000 balance the first month's interest is $91.67. Of a $200 payment, only $108.33 actually reduces the debt. Next month the interest is charged on a slightly smaller balance, so a little more of the same payment goes to the debt, and the balance falls faster as it goes.

For a fixed payment the number of months has a closed form, −ln(1 − r × balance ÷ payment) ÷ ln(1 + r), where r is the monthly rate. For a target number of months the payment comes from the same annuity formula a loan uses. The calculator runs the schedule month by month as well, rounding the interest to the cent as a card would, so the last payment and the total interest match what you would actually pay.

Why minimum payments take so long

A minimum payment of 1% of the balance plus interest starts at $141.67 on $5,000 at 22%, of which $91.67 is interest and only $50 reduces the debt. As the balance falls, the minimum falls with it, so the amount going to the debt keeps shrinking too. The balance never drops by more than about 1% a month until the $25 floor takes over, and the result is 19 years 2 months and $8,099.70 of interest, more than the original balance.

A fixed payment works the other way. Because the payment stays at $200 while the interest shrinks, the share going to the debt grows every month. That is the whole trick of paying off a card: pick a payment you can keep up, keep it the same as the balance falls, and do not add new charges.

With several cards, send every spare dollar to the one with the highest APR while paying the minimum on the rest; this avalanche order always costs the least interest. A balance transfer to a 0% card can help too, but check the transfer fee, often a few percent of the balance, and what rate applies when the promotion ends, and aim to clear the balance before then.

$5,000 at 22%: payment against time

The monthly payment that clears $5,000 at 22% APR in each time frame, set against paying the minimum of 1% plus interest, at least $25.

A worked example you can check on paper

A $5,000 balance at 22% APR, paying $200 a month. The monthly rate is 22 ÷ 12 = 1.8333%, so the first month's interest is 5,000 × 0.018333 = $91.67 and the balance after the first payment is 5,000 + 91.67 − 200 = $4,891.67.

The number of months is −ln(1 − 0.018333 × 5,000 ÷ 200) ÷ ln(1.018333) = −ln(0.54167) ÷ 0.018167 = 33.75, so it takes 34 payments: 33 of $200 and a final one of $149.90. The total paid is 33 × 200 + 149.90 = $6,749.90, of which $1,749.90 is interest.

To clear it in 24 months instead, the payment is 5,000 × 0.018333 ÷ (1 − 1.018333 to the power −24) = $259.40, and the interest falls to $1,225.30.

Mistakes that catch people out

Paying less than the interest. If the payment does not cover the month's interest, the balance grows. The calculator tells you the least you must pay to make progress.

Paying down the card while still using it. New purchases reset the clock. Every figure here assumes no new charges.

Forgetting the rate can change. Promotional rates end, and a late payment can trigger a penalty rate. Rerun the numbers when your statement shows a new APR.

Putting extra money on the lowest rate card. Extra payments save the most on the card with the highest APR.

Relying on the minimum shown on the statement. The minimum is set to keep the account current, not to clear it. Treat it as the floor, never the plan.

Popular calculations

Each opens the calculator with those values filled in, and they can be changed once it is open. Unless shown otherwise they use an APR of 22%.

Months to pay off at a fixed payment

Different interest rates

Payment to clear the card by a deadline

How this was checked

The month by month schedule was checked against the closed form for the number of payments, −ln(1 − r × balance ÷ payment) ÷ ln(1 + r), and the payment for a set number of months against the standard annuity formula; for $5,000 at 22% over 24 months both give $259.40. Totals were checked so that the payments add up to the balance plus the interest to the cent. The minimum payment comparison follows the assumptions the Consumer Financial Protection Bureau sets for the repayment box on statements: only the minimum paid, no new purchases, and all months the same length.

Every address in the lists above was then opened and checked for a distinct title, the right number of months or payment, a chart that renders, and clean CSV, image and print output containing only the values entered, at desktop, tablet and phone widths.

Common questions

How long does it take to pay off $5,000 at $200 a month?

At 22% APR, 34 months: 33 payments of $200 and a last one of $149.90. The interest comes to $1,749.90, so you repay $6,749.90 in total. At $300 a month it takes 21 months and $1,021.61 of interest.

How is credit card interest calculated?

Most issuers divide the APR by 365 to get a daily rate, apply it to the balance each day, and add the total at the end of the billing cycle. Over a month that is very close to the APR divided by 12 on the average balance, which is what this calculator uses, so a statement can differ by a few dollars.

How is the minimum payment worked out?

It depends on the card agreement. A common formula is 1% of the balance plus that month's interest and fees, with a floor such as $25; others use 2% or 3% of the balance. Because the minimum shrinks as the balance falls, paying only the minimum can take well over a decade. Enter your own card's formula to compare.

What does the payoff box on my statement mean?

US statements show how long the balance would take to repay at the minimum and the monthly payment that would clear it in three years, following the Consumer Financial Protection Bureau rules in Regulation Z. Both assume you make no new purchases, which is the same assumption used here.

Should I pay off the highest rate card or the smallest balance first?

Paying extra on the highest rate card first, the avalanche method, always costs the least interest. Paying off the smallest balance first, the snowball method, costs a little more but clears whole cards sooner, which some people find easier to stick with. Either way, keep paying the minimum on every other card.

Does paying twice a month help?

A little. Interest is charged on the average daily balance, so paying half the amount mid cycle lowers that average and saves some interest. The bigger gain comes from paying more in total, not from splitting the same amount.

Related Calculators and Reference

• Loan Payment Calculator: compare a lower rate personal loan to consolidate card debt.
• Mortgage Calculator: how clearing card debt changes what a home loan costs you each month.
• Compound Interest Calculator: what the same monthly payment grows to once the card is clear.
• Percentage Calculator: work out what share of each payment is interest.
• Present Value Calculator: the time value of money behind every loan and card balance.
• Debt Payoff Calculator: several debts at once, avalanche against snowball.
• CFPB Regulation Z, Appendix M1: Repayment disclosures: how the payoff box on a US card statement is calculated.