Credit Card
Calculate credit card payoff time and interest
Calculators on this site provide estimates for general informational purposes only. They are not financial, investment, tax, or legal advice. Consult a qualified professional before making any decision.
How to use Credit Card
- 1Enter the current balance, the card's annual percentage rate and the amount you plan to pay each month.
- 2If you only pay the minimum, tick that option to see how many years it would take to clear the balance.
- 3Read the number of months, the total interest, and how much a fixed monthly payment would save you.
How credit card interest builds up
Monthly interest = average daily balance × APR ÷ 365 × days in cycleMost cards use the average daily balance method. The issuer adds up each day's balance in the cycle, divides by the number of days, then applies the daily rate, which is the APR divided by 365, multiplied by the days in the cycle. Paying early in the cycle therefore cuts interest noticeably, while paying on the last day leaves the full cycle to accrue.
The minimum payment trap is that it is usually only 1% to 3% of the balance plus interest and fees. On a balance of 20,000 at 18% APR paying 2% minimum, about 300 of the first 400 payment is interest and only 100 reduces the balance, which takes more than 30 years to clear and costs nearly three times the original balance in interest. Paying a fixed 1,000 a month instead clears it in about 24 months for roughly 4,000 in interest. The gap is dramatic.
| Approach | Monthly payment | Time to clear | Total interest |
|---|---|---|---|
| Minimum only (2%) | from ≈ 400 | over 30 years | ≈ 58,000 |
| Fixed 800 | 800 | ≈ 32 months | ≈ 5,600 |
| Fixed 1,500 | 1,500 | ≈ 16 months | ≈ 2,800 |
Repayment comparison (balance 20,000 at 18% APR)
Frequently asked questions
Does paying only the minimum hurt my credit score?
As long as you pay at least the minimum, there is no late marker and the account still reports as current. But carrying a high balance keeps your credit utilisation, the ratio of balance to limit, elevated, and utilisation is a major scoring factor at roughly 30% of the score. Staying above 30% utilisation drags it down.
Why is there interest again after I paid?
Residual interest. Balance kept accruing between your payment date and the statement date, and that interest lands on the next statement. To stop interest entirely, pay the full statement balance before the statement date and stop using the card for a full cycle, then confirm the next statement shows zero interest.
Is an instalment plan better than paying the minimum?
Usually yes. Instalment plans lock in a lower rate, often 7% to 12% a year against the 18% revolving rate, with a fixed payment and a clear end date. Watch for arrangement fees, and check whether paying early still leaves remaining charges due, so compare the true annualised cost before signing up.
What is the fastest way out of card debt?
Two common strategies. The snowball clears the smallest balance first for psychological momentum, while the avalanche targets the highest rate first and saves the most interest mathematically. Either way, stop adding new spending, fix your monthly payment, and consider moving the highest-rate balance to a cheaper facility.
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