Credit Card Payoff Calculator

How it works

Credit card interest compounds monthly on the outstanding balance. This calculator simulates repayment month by month: each month, interest is added at APR divided by 12, then your fixed payment is subtracted, until the balance reaches zero. The totals reveal why fixed payments beat minimum payments so decisively. A minimum payment is typically the month's interest plus about 1 percent of the balance, so it barely dents the principal at first; a $5,000 balance at typical APRs can take well over a decade to clear on minimums alone, with interest rivaling the amount borrowed. A fixed payment chips away at the principal at a constant or growing pace, so the interest charge shrinks every month and the payoff accelerates. The critical threshold is the first month's interest charge: balance times APR divided by 12. If your payment is below that figure, the balance grows and the debt can never be repaid; this calculator warns when that happens. Results assume the APR and payment stay constant and you make no new purchases on the card.