Credit Card Payoff Calculator

How this is calculated

months = −ln(1 − r·B ÷ M) ÷ ln(1 + r)   where r = APR ÷ 12, B = balance, M = payment

Worked example: $5,000 at 20% APR, paying $200/month → clear in roughly 2 years 9 months with about $1,500 of interest. Double the payment and both numbers fall dramatically.

The fastest route

Pay as far above the minimum as you can, target the highest-APR card first, and consider a 0% balance transfer if you qualify — the maths above shows exactly what each extra dollar buys you.

Why the minimum payment is designed to keep you there

A typical minimum payment is a small percentage of the balance — often 2–3%, sometimes with a floor of a fixed amount. Because it falls as the balance falls, the schedule stretches out remarkably: a balance paid at the minimum only can take decades to clear and cost more in interest than the original purchases. That is not an accident of the arithmetic; it is the product working as designed.

The important consequence is that paying any fixed amount above the minimum changes the shape of the problem completely, because the extra goes entirely against capital. Moving from the minimum to a flat payment of the same initial size usually cuts years off the schedule, which the comparison on this page makes visible.

Card interest compounds daily

Most cards compute interest daily on the outstanding balance and add it monthly, so the effective annual rate is meaningfully higher than the quoted nominal rate. On a card quoted at 22%, daily compounding produces an effective rate closer to 24.6%. It also means the day you pay matters: paying earlier in the cycle reduces the average daily balance the interest is calculated on.

The grace period, and how people lose it

Most cards charge no interest on new purchases if the statement balance is paid in full by the due date. Carry any balance and that grace period typically disappears, so new purchases begin accruing interest from the day they are made rather than from the statement date. This is why a card that is "nearly paid off" can behave much worse than expected — the mixture of an old balance and new spending removes the interest-free window entirely.

Cash advances usually have no grace period at all, a higher rate, and a fee charged immediately. Payments are commonly applied to the lowest-rate balance first where the law allows, so a balance-transfer card with new purchases on it can trap the expensive portion for the whole promotional period.

Balance transfers, arithmetic first

A 0% transfer offer is worth taking when the interest saved exceeds the transfer fee — usually 2–4% of the balance — and when you will clear the balance before the promotional rate ends. Compute both: the fee is certain and immediate, the saving depends on paying it down as planned. Transferring and then continuing to spend on the old card is the failure mode that turns a good deal into two debts.

Order of attack when you have several cards

Mathematically, paying the highest interest rate first (avalanche) always costs least. Behaviourally, paying the smallest balance first (snowball) closes accounts sooner and is better evidenced for keeping people going. The dedicated snowball and avalanche calculators show the size of the difference for your actual balances — and if it is small, take the method you will finish.