Credit card payoff calculator
Credit card payoff calculator
How long a card balance takes to clear at a payment you choose, what it costs while it lasts, and whether that payment is below the level at which the balance simply grows.
How this is calculated
Each month the balance is grown by one month's interest, then reduced by the payment. The count stops when it reaches zero, and the interest line adds up what the growth cost.
- Cards charge interest on the average daily balance from the date of each transaction, plus tax on that interest and, on many cards, a fee on the overlimit or the bounce. This monthly model is close to the statement, not the statement.
- Cash advances usually start charging from the day they are taken and often at a different rate. Anything new you spend resets the count, so the answer is only for a balance you have stopped adding to.
How long a card balance takes to clear at a payment you choose, what the interest costs while it lasts, and whether that payment even beats the charge for the first month.
The line that decides everything else is the first month’s interest
A card balance charges interest before anything is paid. Compare that figure with the amount you intend to send each month and the whole future of the debt follows: pay less than the interest and the balance grows however diligently you pay, pay barely more and the term stretches into years, pay a real share of it and the count falls quickly. That is why the page prints the first month’s interest as a result rather than hiding it inside a formula — it is the number a minimum-payment trap is built around.
Minimum due is calculated to keep a relationship alive rather than to clear a balance, and on most cards it is a percentage of the outstanding sum plus charges on new spends. A schedule built on it is a schedule built to be renewed.
Where this model stops being your statement
Cards charge on the average daily balance from the date each transaction posts, not on the closing balance once a month; they add GST to the interest, and on some products a fee the moment a payment bounces or a limit is crossed. This page runs the monthly model, which is the same shape as the statement and rarely the same paise. It is the right instrument for choosing a payment level and the wrong one for reconciling a bill.
A cash advance is usually a different rate and starts charging from the day it is taken. Anything new you spend on the card resets the count on a bigger balance, so every figure here is for a card you have stopped using.
The rate field
Enter the annualised rate printed on the statement or the agreement. Where your paper quotes a daily periodic rate, this page works in months, so multiply the daily figure by three hundred and sixty five and enter the result — which is the rate the card is really running at, and often higher than the marketing number. The cap a regulator sets on card pricing is expressed in the same monthly terms most agreements use, so check both the yearly figure and the monthly one your statement shows.
Questions readers ask
Is paying only the minimum ever reasonable?
It is reasonable when the alternative is missing a payment, which costs a fee, a penal rate and a record. It is not a way to clear a balance, and this page shows why in one line: compare the minimum with the interest charged for the month.
Why is there no total when the payment is too small?
Because the total is infinite. A balance that grows every month has no amount that repays it, and printing a figure computed after an arbitrary cut-off would present a made-up number in a currency format.
Will a balance transfer change this answer?
Yes, and it is the correct way to use the page: run it at your card rate, then run it again at the transfer rate with the transfer fee counted as part of the balance, and compare the interest lines. A promotional rate that expires before the term the page prints is a loan that reverts, so check the promised term against the months the arithmetic says you need.
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