Credit Card Payoff Calculator
Payment must exceed monthly interest to pay off
How Credit Card Payoff Works
Credit card debt accrues compound interest daily on unpaid balances, making it one of the most expensive forms of borrowing. Each month, interest is calculated on the remaining balance and added to what you owe. Your payment first covers interest, then reduces principal. The higher your payment relative to the balance, the faster you escape the debt cycle.
Consider a $5,000 balance at 18% APR with $200 monthly payments. Each month, roughly $75 goes to interest initially (5000 × 0.18 ÷ 12), leaving only $125 toward principal. At this pace, payoff takes approximately 32 months with $1,314 in total interest — meaning you pay $6,400 to eliminate $5,000 in debt. Increasing the payment to $300 cuts the timeline to about 19 months and saves over $600 in interest.
Minimum payments are designed to keep you in debt. A typical minimum of 2% of balance or $25 (whichever is greater) on a $5,000 balance at 18% APR can take over 30 years to pay off with thousands in interest. Always pay more than the minimum — even an extra $50/month makes a substantial difference in total cost and payoff time.
Balance transfer cards offering 0% APR for 12–18 months can accelerate payoff if you commit to paying off the balance before the promotional rate expires. A $5,000 transfer with a 3% fee ($150) but 0% for 15 months allows every dollar of your $350/month payment to reduce principal — eliminating the debt in 15 months with minimal cost.
Enter your current balance, APR, and planned monthly payment to see how many months until you are debt-free and how much interest you will pay. Experiment with higher payments to see the dramatic impact on both timeline and total cost.
Examples
| Example | Result |
|---|---|
| $5,000 balance, 18% APR, $200/month | 32 months, $1,314 interest, $6,400 total |
| $3,000 balance, 15% APR, $150/month | 24 months, $474 interest, $3,600 total |
| $8,000 balance, 22% APR, $300/month | 37 months, $3,083 interest, $11,100 total |
| $2,000 balance, 20% APR, $100/month | 25 months, $453 interest, $2,500 total |
| $5,000 balance, 18% APR, $300/month | 20 months, $797 interest, $6,000 total |
| $10,000 balance, 16% APR, $400/month | 31 months, $2,246 interest, $12,400 total |
| $1,500 balance, 24% APR, $75/month | 26 months, $435 interest, $1,950 total |
Frequently asked questions
Most cards use daily compounding: daily rate = APR ÷ 365, applied to your average daily balance each billing cycle.
Minimum payments mostly cover interest, barely reducing principal. A $5,000 balance at 18% APR can take decades to pay off with minimum payments.
A 0% APR balance transfer can save significant interest if you pay off the balance before the promotional period ends. Watch for transfer fees (typically 3–5%).