How credit card payoff works
Each month, interest is charged on your balance based on the card's APR. Your payment first covers that interest, and whatever is left reduces the principal. The higher your payment, the more goes to principal — so you pay off faster and pay far less interest overall. This calculator steps through your balance month by month until it reaches zero.
The math behind it
Your monthly interest rate is the APR divided by 12. Each month the calculator adds balance × monthly rate in interest, then subtracts your payment. For the balance to ever shrink, your payment must be larger than that first month's interest:
Monthly payment > Balance × (APR ÷ 12)
On a $5,000 balance at 22% APR, one month of interest is about $92 — so any payment at or below that never clears the card.
Worked example
Balance $5,000, APR 22%, paying $200/month with no new spending:
- Time to pay off: about 2 years 10 months
- Total interest paid: ≈ $1,750
- Total you pay: ≈ $6,750
The minimum-payment trap
Small payments are mostly interest, so they keep you in debt for years. Same $5,000 at 22%:
- Paying $150/month → about 4 years 4 months and ≈ $2,798 interest
- Paying $200/month → about 2 years 10 months and ≈ $1,750 interest
- Paying $300/month → about 1 year 9 months and only ≈ $1,022 interest
Raising the payment by $100 here saves over $1,700 in interest and more than two years.
Key terms
APR — the yearly interest rate on your card. Principal — the actual amount you owe, before interest. Minimum payment — the smallest amount the issuer requires, usually a tiny percentage of the balance. Revolving balance — debt you carry from month to month, which is what gets charged interest.
Common mistakes to avoid
Paying only the minimum and assuming the balance is shrinking meaningfully. Continuing to spend on the card while "paying it down." Ignoring the APR when choosing which card to clear first (tackle the highest-APR balance first). Missing payments, which can trigger penalty APRs and late fees.
Frequently asked questions
What if my payment is too low?
If your monthly payment doesn't even cover one month of interest, the balance never goes down. The calculator warns you to increase it.
How is credit card interest charged?
Interest accrues on your balance from the APR and usually compounds monthly (or daily). Your payment covers that interest first; only the rest reduces principal.
What is the minimum-payment trap?
Minimums are set low so most of the payment is interest, keeping you in debt for years. A fixed higher payment clears the balance far faster — see the example above.
Which card should I pay off first?
Generally the one with the highest APR (the "avalanche" method) to minimise interest. Some prefer clearing the smallest balance first (the "snowball") for motivation.
Does paying a bit more really help?
Yes, dramatically. Raising the payment from $200 to $300 on the example above saves over $700 in interest and a full year.
Does this include new purchases?
No. It assumes you stop adding new charges while paying it off.
Should I consider a balance transfer?
A 0% balance-transfer card can pause interest for a promo period, but watch for transfer fees and the rate after the promo ends.
Is my data saved?
No. Everything runs in your browser; nothing is uploaded.