DEBT PAYOFF
Paying only the minimum on a credit card can keep you in debt for decades, because most of each payment is swallowed by interest. This calculator shows how long a fixed monthly payment takes to clear your balance and how much interest you pay on the way. Enter your balance, APR and the fixed payment you can afford, then press Calculate to see your payoff date.
Enter your credit card balance, APR and a fixed monthly payment to see how long the balance takes to clear, how much interest you pay, and what paying $25 more a month would save.
This calculator uses the fixed monthly payment you enter, not the minimum payment, which falls as the balance falls. This is an estimate for planning only. It assumes a fixed APR, no new spending on the card and payments made on time each month, and it is not financial advice.
Say you owe $6,000 at 24% APR and you fix your payment at $250 a month. The balance clears in 34 months, by August 2029. You pay $2,256 in interest, and $8,256 in total.
Add just $25 more, paying $275 a month, and the balance clears in 29 months instead. The interest falls to $1,962, so that extra $25 a month saves you $293 and leaves you debt free on this card 5 months sooner.
Compare both of those with the minimum payment on your statement. Because the minimum falls as the balance falls, it stretches the same debt over far more years and far more interest. A fixed payment that you control is what makes the payoff date real. The Consumer Financial Protection Bureau offers free guides on loans, credit cards and debt.
Credit card interest is charged on the balance you owe each month. At an APR of 24%, a $6,000 balance costs about $120 in interest in the first month alone, and every payment you make has to cover that interest before it reduces the balance at all.
Minimum payments are usually only a small percentage of the balance, often the interest plus about 1% of what you owe. Because the minimum is worked out from the balance, it falls as the balance falls, so the debt is cleared more and more slowly and can stretch over many years, sometimes decades.
A fixed payment works differently. Because the payment stays the same while the balance falls, the interest charged each month shrinks, so a bigger share of every payment goes towards the balance itself. The payoff speeds up as it goes, and that is why even a small fixed extra amount, such as $25 a month, saves a surprising amount of interest and clears the card months sooner.
It depends on three things: your balance, your APR and how much you pay each month. Paying only the minimum can stretch even a moderate balance past 10 or even 20 years, while a fixed payment well above the minimum can clear the same balance in a few years.
The minimum payment is the smallest amount the issuer allows you to pay each month. It is often the interest charged plus about 1% of the balance, or a small fixed floor amount. Paying it keeps the account current, but it clears the debt very slowly.
A 0% balance transfer can help, but only if the transfer fee, usually 3 to 5% of the balance, is less than the interest you would otherwise pay, and you clear the balance inside the offer period before the standard rate returns.
Usually, yes, over time. Clearing the balance lowers your credit utilisation, which is the share of your available credit that you are using, and a clean record of on-time payments helps too. The improvement builds gradually rather than overnight.