Credit Card Payoff Calculator
Escape the minimum payment trap and become debt-free faster
Credit card debt can feel overwhelming, especially when minimum payments barely touch your balance. This calculator shows you exactly how long it will take to pay off your credit card and how much interest you'll pay. Compare minimum payments versus fixed monthly payments to see the dramatic difference a few extra dollars can make in your journey to debt freedom.
Open Source & Transparent
All calculations are open source and verifiable on GitHub. We believe in transparency and welcome contributions to improve our tools.
Debt Freedom Date (Fixed Payment)
Moderate - Under 5 Years$200/month
March 2030
Time to Freedom
4y 3m
Total Interest
$2,352
You Save
$3,907,524
Faster By
45y 9m
Credit Card Details
Total amount you owe on this card
Your card's interest rate • Monthly: 1.54%
Min: $100 • Extra: $100
With Your Payment
4y 3m
to debt freedom
vs. Minimum Payments
$3,907,524
saved in interest
45y 9m
faster payoff
Every extra dollar above your minimum goes directly to principal, speeding up your payoff.
Quick Insights
Interest as % of Balance
47.0%
You'll pay this much extra on top of your balance
Effective Cost per Month
$46
Average interest paid each month
Extra Payment Impact
$39,075
saved per dollar above minimum
Understanding Credit Card Interest
Credit card companies have perfected the art of keeping you in debt. When you only pay the minimum, most of your payment goes toward interest charges, not your actual balance. This keeps you paying for years—sometimes decades—while the card issuer collects multiples of your original debt.
Understanding how credit card interest works is the first step to breaking free from the debt cycle.
The Minimum Payment Trap
Credit card minimum payments are designed to maximize the issuer's profits, not help you get out of debt. Here's how the trap works:
- 1. Low Minimums: Most cards require only 1-3% of your balance, ensuring you stay in debt longer.
- 2. Interest Priority: The bulk of your minimum payment covers interest, barely touching principal.
- 3. Compound Growth: Unpaid interest gets added to your balance, and you pay interest on interest.
- 4. Decades of Payments: A $5,000 balance can take 30+ years to pay off with minimums only.
How Credit Card Interest Is Calculated
The Formula
Credit card interest is calculated using your APR (Annual Percentage Rate) divided by 12:
Example: $5,000 × (18% ÷ 12) = $75 monthly interest
Daily Compounding
Most cards compound interest daily, meaning your daily balance accrues interest which then becomes part of your balance. This "interest on interest" effect accelerates debt growth when you carry a balance month to month.
Strategies for Faster Payoff
Pay More Than Minimum
Any amount above the minimum goes directly to principal, reducing your balance faster. Even an extra $50/month can save years of payments and thousands in interest.
Bi-Weekly Payments
Pay half your monthly amount every two weeks. This results in 26 half-payments (13 full payments) per year instead of 12, and reduces average daily balance for less interest accumulation.
Balance Transfer
A 0% APR balance transfer card can give you 12-21 months to pay down principal without interest charges. Be aware of transfer fees (usually 3-5%) and the regular APR after the promo period.
Stop New Charges
You can't get out of a hole while still digging. Freeze the card, switch to debit, or use the envelope budgeting system until your balance is paid off.
Important Considerations
- • This calculator assumes you stop using the card while paying it off
- • Actual minimum payments vary by issuer—check your statement for exact terms
- • Late payments can trigger penalty APRs of 29.99% or higher
- • If you're struggling with debt, consider speaking with a nonprofit credit counselor
- • Multiple high-interest cards? Check our Debt Payoff Calculator for avalanche vs. snowball strategies
Frequently Asked Questions
How long does it take to pay off a credit card with minimum payments? ▼
Paying only the minimum can take 10-30+ years to pay off credit card debt. For example, a $5,000 balance at 18.5% APR with 2% minimum payments would take over 30 years and cost more than $10,000 in interest— that's 2x your original balance in interest alone!
What happens if I only pay the minimum on my credit card? ▼
Most of your payment goes to interest, with only a small portion reducing your balance. Your debt shrinks very slowly, you pay massive amounts in interest over time, and you stay in debt for years or decades. Credit card companies love minimum payment payers!
Is it better to pay off credit cards or save money? ▼
Generally, pay off high-interest credit card debt first (keep a small emergency fund of $500-1,000). Credit card APRs of 15-25%+ far exceed savings account returns. Paying off a 20% APR card is like earning a guaranteed, tax-free 20% return—you can't beat that elsewhere.
What is negative amortization? ▼
Negative amortization occurs when your payment is less than the monthly interest charge. Instead of decreasing, your balance grows each month. This can happen with very low minimum payments on high-APR cards. Always ensure your payment exceeds your monthly interest to make progress.
How can I pay off my credit card faster? ▼
The most effective strategies: 1) Pay more than the minimum every month, 2) Make bi-weekly payments, 3) Stop making new charges on the card, 4) Apply windfalls (tax refunds, bonuses) to your balance, 5) Consider a 0% APR balance transfer to pause interest, 6) Use the debt avalanche or snowball method for multiple cards.
Should I get a balance transfer card? ▼
A 0% APR balance transfer can be helpful if: you have good credit to qualify, you're committed to paying off the balance before the promo period ends, and the transfer fee (3-5%) is less than the interest you'd otherwise pay. Don't use it as an excuse to rack up more debt!
When should I seek professional help for credit card debt? ▼
Consider speaking with a nonprofit credit counselor if: minimum payments exceed 20% of your income, you're only making minimum payments on multiple cards, you've missed payments or been contacted by collections, or you're considering bankruptcy. They can help negotiate with creditors and create a debt management plan.
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