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Credit Card Payoff Calculator

Calculate how long it will take to pay off your credit card balance.

Finance
Credit Card Payoff Calculator
Calculate how long it will take to pay off your credit card.

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Create a Debt Payoff Strategy

This powerful tool helps you create a plan to become debt-free. By entering your credit card balance, Annual Percentage Rate (APR), and your planned monthly payment, the calculator estimates how long it will take to pay off the balance and the total amount of interest you'll pay. It's a crucial tool for anyone serious about tackling high-interest credit card debt.

The Payoff Formula Explained

The calculator uses a logarithmic formula to solve for the number of payment periods (N). N = -ln(1 - (B*i)/P) / ln(1+i)

  • N: The number of months to pay off the balance.
  • B: The outstanding balance.
  • i: The monthly interest rate (APR / 12).
  • P: Your fixed monthly payment.

How to Use the Calculator

  1. Card Balance: Enter your current credit card balance.
  2. Interest Rate (APR %): Input the Annual Percentage Rate of your credit card.
  3. Monthly Payment: Enter the amount you plan to pay each month.

Real-World Example

You have a $5,000 credit card balance with an 18% APR. You decide to pay $200 per month.

  • Balance (B): $5,000

  • Monthly Rate (i): 18% / 12 = 1.5% or 0.015

  • Payment (P): $200

  • The calculator will show that it will take you 30 months (2 years and 6 months) to pay off the balance.

  • You will pay a total of $982.16 in interest.

Frequently Asked Questions (FAQ)

  • What if I only make the minimum payment? Making only the minimum payment will dramatically increase the time it takes to pay off the balance and the total interest you pay. It's always best to pay as much as you can afford.
  • Why is the total interest so high? Credit card interest compounds, meaning you pay interest on your interest. High APRs can cause your balance to grow quickly if you're not making significant payments.
  • Should I use a balance transfer card? A balance transfer to a card with a 0% introductory APR can be a great strategy. It allows all of your payment to go toward the principal for a set period. However, be aware of any balance transfer fees and the interest rate after the promotional period ends.