Credit Card Payoff Calculator
Calculate how long it will take to pay off your credit card debt. See the impact of paying more than the minimum.
A $5,000 card balance at 22% APR takes 34 months to clear on a $200 monthly payment, costing $1,750 in interest — while the 2% minimum payment would take 137 months and $8,678.
Calculator
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How This Calculator Works
Credit card payoff uses the amortisation formula with a fixed monthly payment:
n = -ln(1 - r×B/P) / ln(1+r)
Where r is monthly rate, B is balance, P is payment.
Worked example
Using the defaults — a $5,000 balance at 22% APR with a $200 monthly payment:
Start with the monthly rate. 22% ÷ 12 = 1.833% a month, or 0.018333 as a decimal. Credit card APR is quoted annually but applied monthly, which means the effective annual cost is 24.4%, not 22%.
Check that the payment exceeds the interest. Month one interest is $5,000 × 0.018333 = $91.67. A $200 payment clears that and reduces the balance by $108.33. If the payment were below $91.67 the balance would grow and the debt would never be repaid.
Run the schedule to zero. The balance clears in 34 months — 2 years 10 months. Total interest paid: $1,750. Total outlay: $6,750 for a $5,000 balance, so the borrowing costs 35% of the principal.
Compare with the minimum. A typical minimum is 2% of the balance, about $100 at the start and falling as the balance drops. That path takes 137 months — over eleven years — and costs $8,678 in interest. Paying $200 instead of $100 saves $6,928 and roughly eight and a half years for an extra $100 a month.
Enter 5000, 22 and 200 above to reproduce the 34-month result. The model assumes a fixed payment and no new charges. Any new spending on the card resets the clock and is the single most common reason payoff plans fail.
What each extra $100 a month is worth
The same $5,000 balance at 22% APR, repaid at five different monthly amounts.
| Monthly payment | Months to clear | Time | Total interest | Total paid |
|---|---|---|---|---|
| $100 (2% minimum) | 137 | 11 yr 5 mo | $8,678 | $13,678 |
| $150 | 52 | 4 yr 4 mo | $2,798 | $7,798 |
| $200 (default) | 34 | 2 yr 10 mo | $1,750 | $6,750 |
| $300 | 21 | 1 yr 9 mo | $1,022 | $6,022 |
| $500 | 12 | 1 yr | $574 | $5,574 |
Figures computed by simulating the amortisation month by month until the balance reaches zero. Paying $500 a month instead of the minimum clears the debt in a year and saves $8,104 in interest.
Common mistakes with this calculation
- Continuing to spend on the card. A payoff plan assumes no new charges. Adding $300 of spending a month while paying $200 down means the balance grows. Freeze the card, remove it from wallets and browsers, and use a debit card until the balance is zero.
- Not knowing that the minimum payment falls as the balance drops. A minimum set at 2% of the balance shrinks every month, so the payoff slows as you go. This is why minimum-payment schedules take a decade or more. Fixing a flat dollar payment instead keeps the pressure on.
- Focusing on the balance rather than the rate. A $500 balance at 29% costs more than a $2,000 balance at 9%. Within the constraints of what you can actually pay, target the highest rate first — the avalanche method — to minimise the interest bill.
- Ignoring balance-transfer options. A 0% transfer offer for 18 months, minus a 3% fee, can be materially cheaper than 22% for the same period. Run the numbers: a 3% fee on $5,000 is $150, against roughly $1,400 of interest over the same 18 months at 22%.
When this calculator does not apply
- It assumes a fixed monthly payment. Real minimums recalculate and often fall, which lengthens the schedule.
- It assumes no new charges are added to the balance.
- It does not model a balance-transfer fee, an introductory rate period, or a rate change on a variable-APR card.
- It assumes the rate is fixed. Most card APRs are variable and move with the prime rate.
- It does not account for the credit-score effect of running a high utilisation ratio while paying down, which can affect other borrowing costs.
Frequently Asked Questions
How much should I pay?
Always pay more than the minimum. The minimum is typically 2-4% of the balance, which can take decades to pay off. Even $50 extra per month can save years and thousands in interest.
Should I use the avalanche or snowball method?
Avalanche (highest rate first) saves more money. Snowball (smallest balance first) provides psychological wins. Both work — choose the one you will stick with.
Sources & Methodology
This calculator uses standard financial formulas. See our methodology page for the full formula derivation.
- What Is a Credit Card Interest Rate? Consumer Financial Protection Bureau
- Credit Card Industry Data Federal Reserve
- Consumer Credit Card Agreements Consumer Financial Protection Bureau
- How to Repay Credit Card Debt Consumer Financial Protection Bureau
- Credit Card Interest Rates Federal Reserve
Last reviewed .
Key takeaways
- $5,000 at 22% on a $200 payment clears in 34 months and costs $1,750 in interest.
- The 2% minimum would take 137 months and cost $8,678 — nearly five times the interest.
- An extra $100 a month saves $6,928 and about eight and a half years.
- Any new spending on the card resets the clock. Stop using it.
- The minimum payment falls as the balance drops, which is why minimum-only payoff is so slow.