How to work out your credit card payoff
- Enter the Card balance and the card’s APR from your statement.
- Choose Time to pay off and type what you can pay each month, or choose Payment needed and type how many months you want to be done in.
- Read the payoff time or payment, the total interest and the month of your last payment. The tables show other payoff times and how the balance falls each year.
Why minimum payments take so long
Card minimums are often a small percentage of the balance plus interest, so the payment shrinks as the balance falls and the debt drags on for years. A fixed payment works much faster. On a 5,000 balance at 22% APR, paying a steady 100 a month takes 137 months (11 years 5 months) and costs 8,678.06 in interest. Doubling that to 200 a month cuts the time to under 3 years and the interest by about 80%.
| Monthly payment | Time to pay off | Total interest |
|---|---|---|
| 100 | 11 years 5 months | 8,678.06 |
| 200 | 2 years 10 months | 1,749.88 |
| 300 | 1 year 9 months | 1,021.60 |
Ways to pay less interest
- Pay a fixed amount, not the minimum. Set up an automatic payment for the amount this calculator suggests, so it doesn’t fall as your balance does.
- Stop adding to the balance. New spending on the card pushes the payoff date back. Use a debit card while you clear it.
- Look at a 0% balance transfer. Many cards offer 0% on transferred balances for a set period, usually for a fee of a few percent. Work out the payment that clears the balance before the offer ends.
- Several cards? Use the debt payoff calculator to compare paying the highest rate first (avalanche) with the smallest balance first (snowball).