Credit Card Payoff Calculator

Estimate only, not financial advice. This page amortizes one balance at the APR you type. It is not a credit-counseling plan, not a tax opinion, and not a promise about what a card issuer will accept. The 22 in the APR field is a placeholder. Use the APR on your statement. For help you cannot sort out from the statement, talk with a nonprofit credit counselor or a financial adviser.

How the payoff is calculated

The monthly interest rate is the APR divided by 12 and then by 100. A 22 percent APR is 0.22 ÷ 12 each month. Interest for a month is the current balance times that rate. This is a simple monthly step. It is not the daily periodic rate (APR ÷ 365, compounded daily) that many card agreements use, and it does not add late fees or new purchases.

If you fill in a fixed monthly payment, that path runs even when the "pay off in months" box is also filled. The target-months box is ignored in that case. The page walks the balance forward. Each month it charges interest, subtracts the payment, and applies the rest to principal. If the remaining balance is smaller than a full principal portion, the last payment shrinks to interest plus whatever principal is left. The loop stops when the balance is under half a cent, or at 10,000 months, whichever comes first. You see the month count, the total interest, and the total paid.

If the fixed payment is less than or equal to the first month's interest, the balance would never fall. The page stops and tells you the payment and the interest figure. It does not print a payoff date.

If the payment box is empty and you fill in a target number of months, the page uses the standard loan-payment formula instead of the month-by-month walk. Payment = balance × (r × (1 + r)^n) ÷ ((1 + r)^n − 1), with r the monthly rate and n the months you asked for. Total paid is that payment times n, and total interest is total paid minus the starting balance. A zero APR in this mode divides the balance by the number of months. Because this mode multiplies a level payment by every month, it does not shrink the final payment the way the fixed-payment walk does. On a real statement those two methods can differ by a small amount.

Worked examples

Example 1: $5,000 at 22 percent APR, paying $200

Monthly rate = 0.22 ÷ 12. First month's interest is about $91.67, so $200 clears the interest and reduces principal. The walk finishes in 34 months, which the panel summarizes as about 2.8 years. Total interest rounds to $1,750 and total paid rounds to $6,750. The last payment is smaller than $200, which is why total paid is not exactly 34 × 200. Replace 22 with your APR before you rely on the month count. At a lower APR the same $200 finishes sooner. At a higher APR it finishes later.

Example 2: The same balance, paid off in 24 months

Leave the payment box empty and enter 24 in the months box. The required payment rounds to $259 a month. Total interest rounds to $1,225 and total paid to $6,225. Compared with example 1, a higher payment and a shorter life mean less interest. The page is showing the level payment that amortizes the balance in 24 of these monthly steps, not a declining minimum.

Example 3: A payment that only covers interest

On the $5,000 balance at 22 percent APR, a payment of $91.67 or less is at or under the first month's interest. The warning fires and there is no month count. Any fixed payment above that interest will eventually finish in this model, though a payment only a few dollars above interest can take a very long time. Try a payment you can actually send every month, then read the month count before you commit.

When to use this

Use it when you have one card balance, the APR from the statement, and either a payment you intend to make every month or a date you want to be done. It is the right tool for "how much interest does this fixed payment cost" and for "what must I pay to be done in two years." It is the wrong tool for a minimum-payment plan. Issuer minimums often equal a percent of the current balance or a dollar floor, whichever is greater, and then fall as the balance falls. This page never reduces the payment. A minimum-only schedule charges more interest and lasts longer than the same card paid at a fixed amount above the opening minimum. The walk-through of that difference is in The Credit Card Payoff Math Nobody Shows You.

One card at a time. If you have several, run each balance with its own APR. Two ways to aim extra money are in common use. The avalanche sends every extra dollar, after each card's minimum, to the highest APR, which minimizes interest in the arithmetic. The snowball sends the extra dollars to the smallest balance, which clears a card sooner and can be easier to stick with, at the cost of more interest if the small balance is not the expensive one. This page will not rank your cards. It will price one balance at a time so you can compare the interest totals yourself.

What a statement does that this page does not

New purchases, cash advances, penalty APRs, annual fees, and late fees change the balance the formula never sees. If you pay $200 and charge $150, you are not on the $200 payoff path. Daily compounding changes the interest by a little relative to APR ÷ 12. A 0 percent promotional rate belongs in the APR box as 0 for the months it actually lasts. When the promotion ends, rerun the remaining balance at the go-to rate. The page cannot split a single calculation into a promotional period and a later period.

A balance-transfer offer is a new APR, often with a fee added to the balance at the start. Put the fee into the balance you type, use the promotional APR for the months it covers, and do not forget the rate that applies afterward. None of that is stored. Each run is one balance, one APR, one payment or one horizon. An auto loan or a mortgage is a different contract. Those payments live on the Auto Loan Calculator and the Mortgage Payment Calculator. Moving a card balance onto the house is also a different decision. Should I refinance my mortgage and cash-out refinance versus a HELOC discuss that choice. This page still prices only the card.

Common mistakes

• Leaving 22 percent in the APR box. That number is a placeholder. Your statement has the APR that changes the result. A penalty APR and a purchase APR are different. Use the one that applies to the balance you are paying.
• Filling in both a payment and a target and reading the wrong answer. A filled-in payment always wins. Empty it to solve for the payment.
• Modeling a declining minimum as a fixed payment. If you type today's minimum and hold it constant, you are already paying more than a true minimum schedule, which shrinks. The month count will look kinder than minimum-only behavior.
• Ignoring new charges. The balance you type is assumed to be the whole debt, with nothing added later.
• Comparing the two modes to the penny. The fixed-payment walk reduces the last payment. The target-months formula multiplies a full payment by every month. Small gaps between them are expected.
• Using a payment equal to the interest and expecting a long payoff. The page refuses. The balance does not decline.
• Stacking cards into one balance at one APR. Different rates need different runs. A blended APR hides which balance is expensive.

Limitations

One balance, one APR, monthly interest at APR ÷ 12, no fees, no new purchases, no promotional split, and no declining minimum. The fixed-payment path caps the loop at 10,000 months. Results round to the nearest dollar. The tool does not know your credit limit, your utilization, or whether a lender will agree to a hardship plan. It does not give legal or tax advice about canceled debt. If the payment you can afford does not exceed the interest, the honest output is the warning, and the next step is a person: the issuer's hardship options, a nonprofit counseling agency, or both.

FAQ

Why doesn't my statement match the interest to the penny?

Daily accrual, a different day count, and fees are the usual reasons. This model charges APR ÷ 12 once a month on the balance it is tracking. Use it to compare payments and horizons. Use the statement for the amount the issuer says you owe.

What if I can only pay the minimum?

This page will not reproduce a shrinking minimum. Read the issuer's minimum-payment warning on the statement, which is required to illustrate a minimum-only example, and use this tool to test a fixed payment above that minimum. The blog post linked above explains why the two paths diverge.

Does a 0 percent APR mean I pay no interest?

For as long as you enter 0, yes. Interest in the model is zero and the payment is the balance split across the months, in the target-months mode. When the promotional APR ends, the remaining balance needs a new run at the new rate.

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• The Credit Card Payoff Math Nobody Shows You
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