Credit Card Payoff Calculator
Find how long a card takes to pay off, the payment that clears it by a date, and the true cost of minimum payments.
The rate a month on your statement
Works out how long a credit card takes to pay off at a fixed payment, the payment that clears it by a month you choose, or what paying only the minimum costs as the minimum falls with the balance. Every result sits beside the same card paid at its minimum and, when the minimums take longer than three years, paid off in 36 months: the two figures a US statement usually prints, with the interest each one saves.
The rate is read the way the card's country quotes it: a US APR is divided by 12, a UK APR is an effective yearly rate, and elsewhere you enter the monthly rate. A balance transfer can be set against staying, at the same payment.
How to use it
- Country — sets how the rate is read and the starting minimum. The monthly rate in use is shown under the result.
- Work out — the time to pay off at a fixed monthly payment; the payment to clear it in a number of months or by a month; or the time at the minimum payment.
- Minimum — set beside the comparison with minimum payments, or in the form in Minimums mode: a percent of the balance, plus the month's interest when switched on, and at least a floor amount. In the UK it starts at the interest plus 1% of the balance after that interest, as the FCA sets, and at least £5, an issuer's floor. Elsewhere it starts at the interest plus 1% of the balance before it, and at least $25, scaled to your currency: one issuer's formula, as no US rule sets one. Your card agreement has yours. In Minimums these fields are the inputs; in the other modes they sit under Minimum and set the minimum-only comparison, and a fixed payment below the first minimum is flagged.
- Balance transfer — the fee as a percent with a minimum, the 0% months and the rate after. The fee joins the transferred balance.
- Add to Debt Payoff Planner — puts the balance, rate and this month's minimum into the planner on this device and opens it.
How it works
Each month interest is charged on the balance, rounded to the cent, and then the payment lands, as Reg Z's statement estimates assume. The last payment is whatever is left, so it is usually smaller. A minimum is worked out each month from that month's balance, so it falls as the balance does, and never exceeds what is owed. The UK minimum takes its percent of the balance after the month's interest is added; the US example takes it of the balance before.
A payment at or below the first month's interest never clears the balance; the tool says so and gives a payment that does. Runs stop at 100 years. New purchases, fees, penalty rates, minimum interest charges and grace periods are not included.
In a balance transfer, the fee joins the transferred balance and is charged the same rate: 0% for the promotion, then the rate after.
US monthly rate = APR ÷ 12
UK monthly rate = (1 + APR)^(1/12) − 1
Interest = balance × monthly rate, rounded to the cent
UK minimum = max(floor, (balance + interest) × percent + interest)
US example minimum = max(floor, balance × percent + interest)
New balance = balance + interest − payment
Examples
The minimum trap: $5,000 at 22% APR
With the United States selected, paying only the minimum of 1% of the balance plus interest, at least $ 25.00, starts at $ 141.67 a month and takes 19 years 2 months, with $ 8,099.70 of interest. A fixed $ 150.00 a month clears it in 4 years 4 months for $ 2,798.09.
The 36-month payment on the same card
Clearing it in 36 months needs $ 190.96 a month. Interest comes to $ 1,874.14, which saves $ 6,225.56 against the minimum payments. A US statement prints this payment, worked from the daily balance, so it can differ by a little.
A 0% balance transfer for 18 months, 3% fee
Moving the $ 5,000.00 to a card at 0% for 18 months, then 24% APR, adds a $ 150.00 fee. $ 286.12 a month clears it inside the 0% months. At the same $ 150.00 a month, the transfer takes 3 years 2 months and costs $ 695.98 in interest and fee, against 4 years 4 months and $ 2,798.09 of interest by staying.
The same 21.5% APR in the UK and the US
£2,000 at 21.5% APR, paying £100 a month: read as a UK effective rate, the card is charged 1.6361% a month and costs £ 442.42 of interest over 2 years 1 month. Read as a US nominal APR it is 1.7917% a month and £ 498.49 over 2 years 1 month.
Rules and sources
US statements. Reg Z requires a card statement to show how long the balance takes to pay off and what it costs at the minimum payment, and the monthly payment that clears it in 36 months with its cost and saving, all assuming no new purchases. Appendix M1 sets how issuers work these out, from the average daily balance.
US payments and promotions. Any amount paid above the minimum must go to the balance with the highest APR first (12 CFR 1026.53). A promotional rate must last at least six months (12 CFR 1026.55).
UK minimum and payments. The minimum repayment must be at least the interest, fees and charges applied, plus 1% of the amount outstanding (FCA CONC 6.7.5R), which includes that interest. Any floor amount is the issuer's. A repayment goes to the balance with the highest rate first (CONC 6.7.4R).
UK persistent debt. When over 18 months a customer has paid less towards the borrowing than in interest, fees and charges, and the balance stayed at £200 or more, the issuer must tell them (CONC 6.7.27R). If it continues for the next 18 months, the issuer must offer ways to repay faster, usually within three to four years (CONC 6.7.33G), and suspend or cancel the card if the customer does not respond (CONC 6.7.35R). In UK mode, for a balance in pounds, the tool checks the minimum-only payments for this pattern.
Sources
- 12 CFR 1026.7, Periodic statement (b)(12) — eCFR
- Appendix M1 to Part 1026, Repayment disclosures — Consumer Financial Protection Bureau
- 12 CFR 1026.53, Allocation of payments — eCFR
- 12 CFR 1026.55, Limitations on increasing annual percentage rates — eCFR
- CONC 6.7, Post contract: business practices — Financial Conduct Authority Handbook
Reviewed
Frequently asked questions
See also
- Debt Payoff Planner — to pay several cards and loans from one budget, by snowball or avalanche.
- Loan Calculator — to compare a fixed-rate personal loan for the balance.