Credit Card Payoff Calculator

A credit card charges interest on the balance you carry each month. Your payment first covers that interest (and any fee or new spending); only the rest brings the debt down. That is why small payments take so long: at the start, much of each payment is interest.

The formula

monthly rate = APR ÷ 12 ÷ 100 (daily: (1 + APR ÷ 365 ÷ 100)^(365 ÷ 12) − 1)
each month: new balance = balance + balance × monthly rate + spending + fees − payment
months to pay off (fixed payment, no extras) = −ln(1 − balance × monthly rate ÷ payment) ÷ ln(1 + monthly rate)
payment to clear it in N months = balance × monthly rate ÷ (1 − (1 + monthly rate)^−N)
minimum payment = the larger of the floor and (minimum % × balance + interest)

Worked example

You owe $5,000 at 22.9% APR and pay $200 a month. The monthly rate is 22.9 ÷ 12 ÷ 100 = 0.019083, so the first month's interest is $5,000 × 0.019083 = $95.42 and $200 − $95.42 = $104.58 comes off the debt, leaving $4,895.42. The months formula gives −ln(1 − 5,000 × 0.019083 ÷ 200) ÷ ln(1.019083) = 34.3, so it takes 35 payments: 34 of $200 and a last one of $59.78. You pay $6,859.78 in all, of which $1,859.78 is interest.

To clear the same card in 24 months you would need $5,000 × 0.019083 ÷ (1 − 1.019083⁻²⁴) = $261.62 a month, and the interest falls to $1,278.84.

Why minimum payments cost so much

With a minimum of 1% of the balance plus interest (at least $25), the first minimum on that card is $50 + $95.42 = $145.42. As the balance falls, so does the minimum, so the debt shrinks only about 1% a month. Paying only the minimum takes 232 months (19 years 4 months) and costs $8,453.56 in interest. Simply keeping your payment at that first $145.42 clears it in 57 months for $3,212.77 of interest.

Typical minimum payment rules

The minimum % and floor change when you switch currency, as a starting point only. Your statement shows your card's real rule.

• USD: 1% of the balance plus interest and fees, at least about $25–$40 (varies by bank).
• GBP (UK): often 1% plus interest, or 2.5–3%, at least £5–£25. UK rules say the minimum must at least cover interest, fees and 1% of the balance.
• INR (India): usually 5% of the total due, at least ₹100–₹200.
• AED, QAR, SAR (Gulf): usually 5% of the balance, at least about 100.
• EUR: varies widely by country and bank, often 2–5% with a floor of €20–€50.

Avalanche vs snowball

With several cards, you pay every minimum and send any extra to one card. The avalanche method targets the highest rate first and always costs the least interest. The snowball method targets the smallest balance first, so you clear whole cards sooner, which keeps many people motivated. When a card is paid off, its payment rolls onto the next one.

Example: Card A $2,500 at 24.9%, Card B $1,200 at 19.9% and Card C $600 at 29.9%, with minimums of 1% + interest (at least $25) and $100 extra. The starting budget is $76.88 + $31.90 + $25.00 + $100 = $233.78 a month. Avalanche clears C in month 6, A in month 19 and B in month 23, for $1,058.16 of interest. Snowball clears C in month 6, B in month 13 and A in month 24, for $1,117.87. Minimums only would take 167 months and $5,356.71.

Balance transfers

Moving $5,000 to a card with a 3% fee ($150) and 0% for 18 months, still paying $200, leaves $1,550 when the offer ends. At 22.9% after that, it is cleared in 27 months with $143.77 of interest, so the total cost is $293.77 against $1,859.78 by staying, a saving of $1,566.01. Paying $5,150 ÷ 18 = $286.11 a month would clear it before any interest at all. Offers usually need you to pay at least the minimum on time, and new purchases on the card may be charged at a higher rate.

Assumes the rate stays the same, payments are made on time each month, and interest is charged on the balance carried from the previous month. New spending is added to the bill before the payment; the annual fee is added every 12th month. Amounts are not rounded to cents, so your bank's figures may differ by a few cents. Checked on 10 October 2026.