Credit Card Payoff Calculator
Find out how long it takes to pay off your credit card and how much interest you can save by paying more than the minimum payment.
Why Paying Minimums is Expensive
Credit cards have some of the highest interest rates of any loan type. Paying only the minimum payment can take decades to pay off a balance, and you will pay far more in interest than the original amount you owed.
The Snowball vs Avalanche Method
- Avalanche Method — Pay off the highest-interest card first. Saves the most money mathematically.
- Snowball Method — Pay off the smallest balance first. Provides psychological wins that keep you motivated.
Tips to Pay Off Credit Cards Faster
- Pay more than the minimum every month
- Consider a balance transfer card with 0% APR
- Use the debt avalanche or snowball strategy
- Avoid adding new charges while paying off debt
Frequently Asked Questions
What is the fastest way to pay off credit card debt?
The two main methods are: (1) Avalanche Method - pay minimums on all cards, put extra money toward the highest APR card. (2) Snowball Method - pay minimums on all cards, put extra money toward the smallest balance first. Avalanche saves the most money; Snowball provides psychological wins.
How much should I pay monthly on my credit card?
Always pay more than the minimum payment. If you only pay minimums on a $5,000 balance at 20% APR with a 2% minimum, it takes 26 years and costs $7,500 in interest! Even doubling the minimum payment dramatically reduces total cost.
Should I use a balance transfer card?
Balance transfer cards with 0% APR promotional periods (12-21 months) can save thousands in interest. Watch out for transfer fees (typically 3-5%) and have a plan to pay off the balance before the promo ends.
How does minimum payment calculation work?
Credit card minimums are typically 1-2% of the balance plus any interest accrued, or a fixed amount (usually $25-35), whichever is greater. Use our calculator to see how minimum payments keep you in debt.
What is the difference between APR and APY for credit cards?
Credit card APR (Annual Percentage Rate) is the stated interest rate. Since credit cards compound daily, the effective APY (Annual Percentage Yield) is higher. For example, 20% APR ≈ 22% APY when compounded daily.