Credit card payoff calculator

How long will it take to pay off my credit card?

A $5,000 balance at 18% APR paid down $200 a month takes 32 months and costs $1,313.96 in interest, if you add no new charges.

What payment do I need to be debt-free by a date?

Pick "Pay it off in" and enter the months: the calculator gives the fixed payment. $5,000 at 18% over 24 months is $249.62 a month.

Why can a small payment never pay it off?

If the payment is no more than the monthly interest, the balance never falls. At 24% APR, $5,000 accrues $100 of interest a month — a $100 payment only keeps up.

How is the interest figured?

Here as APR ÷ 12 on the balance each month. Card issuers usually use a daily rate on the average daily balance, so their figure will differ slightly.

Does paying more than the minimum help?

A lot: every dollar above the interest goes to the balance. Compare payments in the table to see months and interest drop.

What is the 36-month payment on a credit card statement?

Federal rules (Regulation Z, 12 CFR 1026.7) require a card statement to show how long it would take to pay the balance by making only minimum payments, along with the monthly payment that would clear it in 36 months and the total cost of each. This calculator reproduces the second figure with the “Pay it off in” option: $5,000 at 18% over 36 months is $180.76 a month.

Do I pay interest if I pay the full balance every month?

Generally not on new purchases. Under Regulation Z an issuer that offers a grace period must not charge interest on purchases if you pay the full statement balance by the due date, and the due date has to be at least 21 days after the statement is mailed or delivered. Carry a balance past the due date and the grace period is typically lost until it is paid in full. This calculator is for the case where a balance is being carried.

How the calculation works

Each month the interest is the balance times the APR divided by 12, which is then added to the balance before your payment comes off. For a $5,000 balance at 18% that is $75.00 in the first month. A $200 payment therefore reduces the balance by only $125.00 that month; the share going to principal grows as the balance falls. The loop ends when the balance reaches zero, so the last payment is usually smaller than the rest. If the payment is no more than the first month’s interest, there is no payoff date and the calculator says so.

Worked example: three payments on the same $5,000

At 18% APR with no new charges: $150 a month takes 47 months and costs $1,983.60 in interest; $200 takes 32 months and $1,313.96; $300 takes 20 months and $797.17. Raising the payment from $150 to $300 doubles it but cuts the interest by $1,186.43, because the balance, on which interest accrues, falls faster at every step. The table under the result runs the same comparison for your own numbers.

Common mistakes

Using the quoted APR as a monthly rate, or dividing by 12 twice, gives wildly wrong interest; the card’s daily periodic rate is roughly the APR divided by 365 (about 0.0493% a day at 18%), and the monthly figure here is only a close approximation. Many people also forget that the minimum payment usually shrinks as the balance falls, so paying only the minimum stretches the payoff far beyond a fixed-payment schedule; treat a fixed payment as the plan, not the minimum. Finally, new purchases, late fees and a rate that changes (most card APRs are variable) all alter the result, so rerun the numbers after any of them.

Estimates for planning only — not financial, tax or legal advice. Your lender's or employer's figures decide. How we check our calculators.

Sources: Regulation Z, 12 CFR 1026.7(b)(12) (minimum payment and 36-month disclosures on periodic statements) and 12 CFR 1026.5(b)(2)(ii) (timing of statements and payment due dates), as published by the Consumer Financial Protection Bureau. Related: credit card interest calculator, debt payoff calculator, loan payoff calculator and debt-to-income ratio calculator.