Credit Card Payoff Calculator

How It Works

Credit cards with a low interest rate are hard to find. In fact, the average APR (Annual Percentage Rate) sits at around 15 percent—that’s pretty high. You can look at this number and either roll your eyes and shrug your shoulders or work to ensure your creditors never get that much out of you. The Credit Card Payoff Calculator shows you how much interest you’ll have paid by the end of your payoff date. Use that information to give your debt a complete overhaul and start paying a monthly rate that helps you save on interest charges.

Here’s how:

1. Enter your credit card’s balance and interest rate.
2. Adjust the Monthly Payment to see how paying more can save you money in the long run.

How long will it take to pay off a credit card?

The time it takes to pay off your credit card depends on things like the balance on the card and your APR (Annual Percentage Rate)/interest rates.

Balance: The credit card balance (the amount of money you’ve spent on your credit card) affects how much is needed to pay off that card. While your interest rate remains the same, as your card balance increases, so does your monthly interest charge. Learn more about credit cards by reading this article: Credit Cards.

APR/Interest Rates: APRs (Annual Percentage Rates) and interest rates differ slightly in purpose, but each takes a chunk out of the money you put toward paying off debt. Every time you make a payment, only a portion of it goes toward the owed balance, the rest goes toward interest. This means people have to make extra monthly payments if they want to pay down the actual debt. This forces people to make extra monthly payments so that more of their money will go toward actual debt. Read this article to learn more on the subject of interest. Also, the key to a low interest rate is a good credit score. Learn more here: Credit Scores.

Paying off my credit card faster

To pay off your credit card faster, pay more than the total minimum required each month with amortization. Amortization is the process of making regular principal and interest payments to eliminate debt. To see how much of your monthly payments go toward paying off your balance, you can use an amortization schedule. An amortization schedule helps its users see how to avoid paying a ton in interest.

For most, paying more than minimum isn’t just a strategy, it's a necessity. Let's say your credit card has a balance of $2,000 at an interest rate of 14%. For a 15 month payoff period, you'll be paying $185 in interest or roughly $12.30 per month. In this case, if your monthly minimum payment is $35, just over half of your payment is going toward paying down your balance. That’s no way to tackle debt. Instead, hit it with all you’ve got. Using the snowball or avalanche methods can help pay down debt quickly. Learn more with this article: How to Manage Your Debt.

Different banks and credit card companies may let you negotiate a lower interest rate. Start with the credit cards you’ve had the longest—particularly the cards you’ve never missed a minimum payment on—and remember to only ask about it when you’ve had a recent credit score increase or change in unemployment/employment status.

Paying off my credit card with little to no money

Personal Bankruptcy

Filing for bankruptcy is a last resort solution for overwhelming debt. This is where the court looks at all your assets to see which ones can be used to pay off any outstanding debt. You can check out this article on personal bankruptcy to learn more.

Balance Transfer

If your interest rate is weighing you down, consider requesting a transfer to a 0% offer. During the offer period you can put the money you'd normally spend on interest toward paying down your debt.

Negotiating a Lower Payoff

Debt settlement is when you and your creditor negotiate a lower payoff than what you currently owe. This method can be applied two different ways.

Whatever debt elimination route you decide to go with, just remember to be careful, do your research, make a plan, and stick to it.