Credit Card Payoff Calculator

How to use the credit card payoff calculator

Enter the balance, the purchase APR off your statement, and the fixed monthly payment you plan to make. The tool walks the balance down month by month, taking interest first and applying whatever is left to principal, until the balance reaches zero.

It then runs the same balance a second time paying only the minimum, and puts the two results next to each other. Interest accrues monthly at APR divided by 12, so this is a close model of a statement rather than a reproduction of one.

That $83.33 figure is the number worth carrying away. It is what the balance costs to sit still for one month, and every dollar of a payment below it goes to interest with nothing left over. A payment at or under $83.33 never clears this balance at all.

The fixed payment case is deliberately blunt: the same amount every month until the balance is gone. It clears in 25 months against 486, and it costs $17,366.91 less in interest. Nothing about that comparison depends on discipline or willpower. It is the same balance and the same rate, with a different payment.

Both minimum-payment inputs matter more than they look. Raising the percentage from 2% to 3% pulls the payoff in from 486 months to 178, and moving the floor from $25.00 to $35.00 pulls it to 394. The reference table below runs the fixed-payment ladder so you can see where your own number lands.

Why a minimum payment stretches for decades

A minimum set as a percentage of the balance carries a built-in brake. At 20% APR the balance grows about 1.667% a month, and a 2% minimum only removes about 2% of it, so the gap doing the actual work is roughly a third of a percent a month. As the balance falls, the payment falls with it, and the gap narrows in step.

When a payment never clears the balance

There is a hard line under every payoff schedule: the interest the balance accrues in a month. Pay less than that and the balance is larger next month than it is today. Pay exactly that and it stands still forever. The tool says so in words instead of returning an unreadable number or spinning through a million months.

That threshold is why the same minimum rule behaves so differently across cards. Below 24% APR the percentage part of the minimum still outruns the interest and the balance falls, slowly. At and above it, only the dollar floor is making progress, and on a large balance the floor is far too small to matter.

The formula, worked line by line

A payoff schedule is one small loop repeated. Each month the balance accrues interest at the annual rate divided by twelve, the payment is taken off the total, and whatever survives becomes the opening balance of the next month. Count the loops and you have the months; add up the interest and you have the cost.

The minimum-payment case uses the same loop with one change: the payment is recomputed every month from the balance rather than fixed. A common structure is a percentage of the statement balance with a dollar floor underneath, and both of those are inputs here because no two issuers write the rule the same way.

i = APR ÷ 12 ÷ 100                     (the monthly periodic rate)
interest = balance × i
statement = balance + interest
minimum = max(floor, statement × min%)
balance = statement − payment
never clears when payment ≤ interest

Why this is a model and not a statement

Real issuers do not work in whole months. The common method is a daily periodic rate, the APR divided by 365, applied to an average daily balance, with the result posted at the end of the cycle. Cycle lengths vary, and so does the treatment of a balance paid in full.

The gap between the monthly model and a real statement is small over a few months and grows with the term. Treat the months figure as accurate to within a month or two, and the interest figure as the right order of magnitude rather than a number to reconcile against a bill.

Questions people ask