Debt-free date and total interest paid.
Debt-free date and total interest paid.
Enter your current balance, annual interest rate (APR), and either a target monthly payment or a target payoff date. The calculator shows how long it will take to pay off the debt at your chosen payment amount, the total interest you'll pay, and the total cost of the balance. It also lets you see the dramatic effect of increasing your monthly payment โ even by $25โ$50.
If you carry multiple balances on different cards, use the calculator separately for each, then compare the avalanche vs. snowball strategies below to decide which to tackle first.
Credit cards use a daily periodic rate โ your APR divided by 365. If you carry a $3,000 balance at 22% APR, you're accruing $1.81 in interest every single day. On your statement date, 30 days of interest ($54) gets added to your balance. If you make only the minimum payment, you're barely outpacing the interest โ which is exactly how a $3,000 balance can take 15 years to pay off.
The grace period is crucial: if you pay your full statement balance by the due date, you pay zero interest. Credit cards are completely free to use โ but only if you pay in full each month. Carrying even $1 of a balance from month to month voids the grace period and means you'll owe interest on every new purchase immediately.
If you have multiple cards, two popular strategies exist:
Either method works. Choose based on your personality: if you need visible progress to stay motivated, snowball. If you're motivated by numbers, avalanche.
A 0% APR balance transfer offer can be a powerful payoff tool โ if used correctly. Transfer high-APR balances to a 0% card and make fixed monthly payments to pay it off before the promotional period ends (usually 12โ21 months). Watch for: balance transfer fees (typically 3โ5% of the transferred amount), what the APR jumps to after the promo period, and whether making new purchases on the card affects your payoff plan.
Very bad. Credit card minimums are typically 1โ2% of the balance or $25โ$35, whichever is more. On a $5,000 balance at 20% APR, paying only minimums takes roughly 22 years and costs about $7,000 in interest โ more than the original balance. Doubling your minimum payment cuts payoff time roughly in half.
Yes, significantly. Credit utilization โ the percentage of available credit you're using โ is the second most important factor in your FICO score after payment history. Getting utilization below 30% (ideally below 10%) can add 20โ50+ points to your score, which can lower interest rates on future loans.
Generally no. Closing accounts reduces your available credit (increasing utilization ratio) and can shorten your average account age โ both hurt your score. Keep paid-off cards open and use them occasionally to prevent closure by the issuer. Exception: if a card has an annual fee you can't justify, closing it may be worth the score impact.