Credit card payoff calculator

What this number means

The payoff figure is the month your balance reaches zero if the rate holds, you make every payment on time, and you put nothing new on the card. The interest figure is what the borrowing costs you on top of what you spent.

The comparison against the minimum payment is the part worth sitting with. On the default figures, paying $250 a month rather than the minimum clears the same debt roughly 16 years sooner and costs about $9,350 less in interest. The debt is identical. The only difference is the monthly amount.

This page does not tell you what to do with that. Whether a larger payment is the right use of your money depends on things a calculator cannot see: what else you owe and at what rate, whether you have savings to fall back on, and how secure your income is. The arithmetic is here so you can weigh it yourself.

How this is calculated

Each month, in this order:

• The monthly rate is the APR divided by 12. At 22.9 percent that is 1.908 percent a month.
• Interest is added to the balance: balance multiplied by the monthly rate.
• Your payment is subtracted from that total.
• Whatever is left carries into the next month and accrues interest again.

The final payment is smaller than the rest, because it is only whatever is needed to clear the balance. The schedule shows the real amount, so the rows add up to the total above rather than overstating it by up to one payment.

The order matters and it is not arbitrary: interest is added before the payment lands, which is what every issuer does. It is also why paying the full balance still incurs one final month of interest.

Method follows the Consumer Financial Protection Bureau's explanation of how credit card interest is charged, and the disclosure rules in Regulation Z, 12 CFR 1026.

What this does not account for

• New spending. The calculation assumes you stop using the card. If you do not, the real payoff is longer.
• A rate that moves. Most US cards are variable and track the prime rate, so a rate rise lengthens the payoff even if your payment does not change.
• Fees. Annual fees, late fees and cash advance fees are all excluded, and a late payment can also trigger a penalty APR.
• Promotional rates ending. A 0 percent balance transfer that expires partway through changes the answer sharply, and this page models one rate for the whole term.
• Daily compounding. Issuers use the average daily balance. Over a payoff with no new spending that difference is a few dollars, not a few months.

These are the reasons your issuer's own figure may differ from this one. If the gap is large, the cause is usually the first or the fourth.

Questions

Why does my card issuer quote a different payoff date?

Issuers calculate interest on your average daily balance, and this calculator uses the balance at the start of each month. For a card you are paying down without new spending the two are within a few dollars over the whole payoff. A larger gap usually means something this calculator does not model: a purchase during the period, a fee, or a promotional rate that ended.

What counts as the balance if I am still using the card?

This calculator assumes no new purchases, so it answers the question "what if I stopped using this card today". If you keep spending on it, the real payoff is longer than the figure here, and by more than the amount you spend, because that spending accrues interest too.

Is the minimum payment comparison my actual minimum?

No. Minimum payments are not standardised and yours is on your statement. The comparison here assumes 1 percent of the balance plus that month of interest, with a 35 dollar floor, which is a common US shape. Some issuers charge a flat percentage of the balance with interest already inside it, and that clears far more slowly.

Does the order I pay multiple cards in change anything?

Yes, and this page only models one card. Paying the highest rate first costs the least interest overall. Paying the smallest balance first clears individual cards sooner. Both are real strategies with different results, and which one suits you is not something a calculator can know.

Why is there still interest if I pay the whole balance?

Because the payment is applied after that month of interest is added, which is the order every issuer uses. If you are carrying a balance, one more month of interest is charged before the payment lands. Paying in full every month before the statement date is what avoids interest entirely, and that is a different situation from the one this page models.