How to Use the Calculator
This tool helps you understand the impact of different payment strategies on your credit card debt. Start by entering:
- Current Card Balance: Your total outstanding balance.
- Annual Percentage Rate (APR): Your card's interest rate.
- Minimum Payment Terms: Usually a percentage (e.g., 2%) of the balance or a fixed dollar amount.
- Desired Monthly Payment: What you can realistically pay each month.
Click “Calculate Payoff” to compare:
- Total interest paid
- Time to pay off the debt
- Savings from paying more than the minimum
Understanding the Results
Using U.S. average data:
- Card Balance: $5,733 (average credit card balance per household)
- APR: 20.68% (average APR for existing accounts)
- Minimum Payment Terms: 2% of balance or $25
Paying Only Minimum:
- Monthly Payment (Initial): $189.25
- Total Interest Paid: $4,133.89
- Total Cost: $9,866.89
- Payoff Time: 10 years, 4 months
Paying $300 Monthly:
- Monthly Payment: $300.00
- Total Interest Paid: $1,054.21
- Total Cost: $6,787.21
- Payoff Time: 2 years, 0 months
Savings:
- Interest Saved: $3,079.68
- Time Saved: 8 years, 4 months
Tips to Pay Off Credit Cards Faster
- Pay more than the minimum: Even $50 extra can make a big difference.
- Use balance transfers: Consider a 0% intro APR card to pay down debt interest-free.
- Automate payments: Stay consistent to avoid late fees.
- Target highest APR cards first: Use the avalanche method.
Try the calculator now to create a smart plan for your credit card debt.
FAQ:
Q: What is a typical credit card APR?
A: Many cards range from 17%–25%, depending on credit score.
Q: What if I can only afford the minimum payment?
A: You’ll pay significantly more in interest and take much longer to eliminate the debt.
Q: Does paying early or more frequently help?
A: Yes—more frequent payments reduce your average daily balance.
Q: Should I close my card after payoff?
A: Not necessarily. Keeping it open with no balance can help your credit utilization ratio.
