Bureau of Wealth

Credit Card Payoff Calculator

By the Bureau of Wealth team Updated

This calculator is general information, not financial advice. Check your own figures with the provider or a qualified adviser before acting on them.

Enter your card balance and APR, then choose a fixed monthly payment, a number of months to clear it, or the minimum only, to see how long it takes and how much interest you pay.

How do you want to pay?

Your card's minimum payment rule

Plus that month's interest. Your statement shows your card's rule.

Check the highlighted fields to see your results.

What this calculator assumes

  • You make no new purchases, cash advances or balance transfers on the card while you pay it off.
  • The APR stays the same, and interest is charged monthly at the APR divided by 12 on the balance you carry.
  • The minimum payment is the interest for the month plus the percentage of the balance you set, or the lowest minimum payment if that is higher. Card issuers use different formulas, so check your cardholder agreement.
  • Late fees, annual fees and penalty APRs are not included, and every payment arrives on time.
  • A card with several balances at different rates, such as a promotional balance transfer, is treated as one balance at one APR.

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How the calculator works

Each month the calculator adds interest to the balance at the APR divided by 12, then takes off your payment. It repeats this until the balance reaches zero and counts the months and the interest along the way. You can pay in three ways. A fixed amount pays the same every month. Clear it by a date finds the level payment that brings the balance to zero in the number of months you enter, using the same formula as a fixed-rate loan. Only the minimum recalculates the payment every month from the balance, so the payment falls as the balance falls.

Whichever option you choose, the calculator also runs the minimum-only plan in the background and shows how much interest your plan saves compared with it.

A worked example

Say you owe $5,000 at 24% APR and your card's minimum is the month's interest plus 1% of the balance, with a $25 floor. The first minimum payment is $150, but it shrinks as the balance falls. Paying only the minimum takes 234 months, or 19 and a half years, and costs $8,886.95 in interest, more than the original balance.

To clear the card in 36 months you would pay $196.16 a month and $2,061.91 in interest. Paying a fixed $300 a month clears it in 21 months for $1,143.34. The 36-month figure can be checked with =PMT(24%/12, 36, -5000), which returns 196.16.

What your statement already tells you

The Consumer Financial Protection Bureau explains that card issuers are required to show on your statement how long it will take to pay off your current balance if you pay only the minimum and make no further charges. Under Regulation Z the statement also carries a minimum payment warning and the total you would pay that way, plus the monthly payment that would clear the balance in 36 months and what that would save. The 36-month figures can be left off when paying the minimum would take three years or less. The CFPB points out that those figures do not take future purchases into account, and that you do not have to pay more than the minimum, although paying more means paying less interest. Compare the numbers on your statement with the results here to check your inputs.

Getting the balance down faster

A fixed payment beats the minimum because it does not shrink as the balance falls, so more of each payment goes to the balance over time. If you can, set up an automatic payment for a fixed amount above the minimum and stop using the card for new spending until it is cleared. If you are struggling to pay, the CFPB suggests calling your card company promptly to explain your situation.

If you carry balances on several cards or loans, the debt payoff calculator shows which order to pay them in and when you will be debt-free.

Frequently asked questions

Why does paying the minimum take so long?

The minimum is often mostly interest, with only a small slice going to the balance. As the balance falls, the minimum falls with it, so you never pick up speed. Paying a fixed amount keeps the same pressure on the balance every month.

What is the 36-month payment on my statement?

Card issuers must show the monthly payment that would pay off your current balance in 36 months, based on that balance and ignoring any future purchases. You do not have to pay it, but it is a useful benchmark for a realistic payoff plan.

How do I find my card's minimum payment formula?

It is set out in your cardholder agreement, and your statement shows the resulting minimum each month. Enter the percentage and the lowest minimum payment from that formula under your card's minimum payment rule.

Does the calculator include new purchases?

No. It assumes the balance only goes down. Any new spending on the card adds to the balance and pushes the payoff date back.

Would a balance transfer card help?

A low or 0% introductory rate can cut the interest you pay while the offer lasts, but a transfer fee may apply and a higher rate applies once the offer ends. Work out whether you can clear the balance within the promotional period before you apply.

Sources

Figures come from institutions millions of people rely on. How we keep calculators accurate.