Free calculator
Credit Card Payoff Calculator
Find out how long your card will take to pay off, what the minimum payment really costs, and how much a bigger fixed payment saves.
Calculated estimates for education only, not financial advice. Real returns and card terms vary. See how we check the numbers.
Watch the lesson behind this calculator
Watch the full lesson (10:10) or read the illustrated write-up below. Open on YouTube
Video chapters
- 0:00 $2,000 that costs $4,600
- 0:34 Intro
- 0:42 Sam's $2,000 car repair
- 1:15 How credit cards really work
- 1:51 What 22% APR really means
- 2:52 Where your minimum payment goes
- 3:21 The trap: 11.6 years of payments
- 4:16 Why the minimum exists
- 4:52 The psychology: anchoring
- 5:44 Escape #1: pay a fixed amount
- 6:15 How bigger payments change everything
- 6:51 Escape #2: stop adding to the balance
- 7:13 Escape #3: avalanche, snowball, balance transfers
- 7:54 Paying off debt = a guaranteed return
- 8:59 3 things to do this week
- 9:25 Recap & next lesson
Full write-up: The Credit Card Minimum Payment Trap: How $2,000 Becomes $4,600
How to use this calculator
- Card balance: what you owe today. Use your latest statement.
- APR: the interest rate on your statement. The US average on cards that charge interest is about 22%.
- How you pay: choose only the minimum to see the slow road, or a fixed amount to see how fast a set monthly payment clears the card.
The calculator assumes you stop adding new purchases to the card. Under the results, a table compares the same card at several different monthly payments.
How the calculator works
Interest is charged every month at one-twelfth of the APR on the remaining balance. For the minimum payment, we use a common formula: this month's interest plus 1% of the balance, with a $25 floor. That's what many US card issuers use, but your card's formula may differ, so check your cardholder agreement.
This is the same model we use in Lesson 2, so the calculator reproduces the lesson's numbers exactly.
A worked example: $2,000 at 22%
| How you pay | Time to pay off | Total interest |
|---|---|---|
| Minimum only (shrinking) | 11 years 7 months | about $2,600 |
| Fixed $56.67 (the first minimum, kept the same) | 4 years 10 months | about $1,248 |
| Fixed $100 a month | 2 years 2 months | about $514 |
| Fixed $200 a month | 1 year | about $230 |
Paying only the minimum, a $2,000 car repair ends up costing about $4,600. Paying $200 a month cuts the interest by more than 90%.
Why the minimum payment takes so long
The minimum is mostly interest. On the first $56.67 payment above, about $37 goes to interest and only $20 reduces the debt. And because the minimum shrinks as the balance shrinks, each payment chips away less and less. The finish line keeps moving.
If a payment "never pays off"
If your payment is smaller than the monthly interest, the balance grows instead of shrinking. The calculator warns you when that happens. On $2,000 at 22%, the first month's interest alone is about $37.
Paying off a card is a guaranteed return
Every dollar you put toward a 22% card saves you 22 cents a year in interest, the same as a guaranteed 22% return. No investment can promise that, which is why credit card debt usually comes before investing, right after any employer 401(k) match. Our pay off debt or invest calculator puts all your debts in order.
Frequently asked questions
How long will it take to pay off my credit card with minimum payments?
It depends on your balance, APR and the issuer's minimum formula. With a common formula (interest plus 1% of the balance, $25 floor), a $2,000 balance at 22% APR takes about 11.6 years and costs about $2,600 in interest.
How much should I pay to clear my card in 3 years?
Choose "a fixed amount" and try different payments until the time to pay off is about 3 years. On $2,000 at 22%, it's about $76 a month. Your statement also shows a "3-year" payment in its minimum payment warning box.
How is a credit card minimum payment calculated?
Many issuers use the month's interest and fees plus 1% of the balance, with a floor of $25 to $35. Others use a flat 2% to 4% of the balance. Check your cardholder agreement for the exact formula.
Does paying more than the minimum help my credit score?
Yes, indirectly. Paying on time protects your payment history, and lowering the balance reduces your credit utilization, the second-biggest factor in a FICO score. Lesson 4 explains how.
Should I use a balance transfer card?
A 0% balance transfer can help if you have a real plan to pay the balance off before the promotional rate ends. There's usually a transfer fee of a few percent, and the rate jumps back up afterward. Use this calculator with a 0% APR and your planned payment to see if you'd make it.