Credit Card Payoff Calculator

Monthly rate = the annual rate ÷ 12. Each month: interest = balance × monthly rate; the balance falls by (monthly payment + extra payment) − interest. The payoff time is the number of months until the balance reaches zero, rounded up. Total interest is the sum of the monthly interest charges over that schedule, and the final payment is what is left to pay in the last month, which is usually smaller than the rest.

B

Balance owed at the start

r

Monthly interest rate: the annual rate divided by twelve

m

The monthly payment you have decided on

x

The extra you add on top of that payment each month

n

Months until the balance reaches zero

I

Total interest paid across those months

F

The final payment: what the last month actually costs

Use it before you commit to an extra payment, because the size of the win is not obvious and it is not proportional. On the balance above, the first 50 a month saves eight months and 324.80; the last 200 a month saves eleven more months and another 478. The shape is the same every time — the first extra pound or dollar does much more work than the last, because it is being applied at the point where the balance is largest and the interest is compounding against you hardest. The other thing this page answers is the question a statement never does: what the final payment will be. On a 200 monthly payment the last month is 113.97 rather than 200, and on a 250 payment it is 239.17, because the last month only has to clear what is left. That matters if you are timing the payoff against some other obligation. What no extra payment can do is rescue a payment that does not cover the interest: 5,000 at 18% charges 75.00 in the first month, so a monthly payment of 75.00 never reduces the balance, and 75.01 takes 600 months — fifty years — and 40,315.63 of interest. That boundary is worth seeing once, because the difference between the two figures is one penny.

1. 5,000 at 18%, paying 200 a month with 50 extra

   1. Monthly rate: 18 ÷ 12 = 1.5% a month, or 0.015 as a decimal
   2. Month one: interest = 5,000 × 0.015 = 75.00; the payment is 200 + 50 = 250, so 175 goes to principal and the balance becomes 4,825
   3. The same arithmetic runs each month, with the interest falling as the balance does
   4. Without the extra 50, only 125 would go to principal in month one and the balance would fall more slowly
   5. With the extra: the balance reaches zero after 24 payments, and the last one is 239.17 rather than 250
   6. Without it: 32 payments and 1,313.97 of interest
   7. The difference: 8 months and 324.80

   The default, and the cleanest way to see what the comparison is for. Fifty a month for two years is 1,200 of extra money, and it removes eight months of payments that would have totalled 1,600 and saves 324.80 of interest — but the numbers that matter are the ones you cannot compute in your head, which is why both runs are printed side by side. The final payment is worth noting too: 239.17, not 250, because the last month only has to finish the job.

2. The same balance with nothing extra

   1. With no extra, the payment is the 200 you chose
   2. Month one: interest is 75.00, so 125 goes to principal
   3. The balance falls by a little more each month as the interest shrinks
   4. The balance reaches zero after 32 payments, and the last one is 113.97
   5. Total interest: 1,313.97, which is 26.3% of the original balance

   The baseline every other figure on this page is measured against, and a useful answer on its own: 32 months and 1,314 in interest on a 5,000 balance. It is also the row where the comparison outputs are all zero, and that zero is meaningful rather than empty — it says you are looking at the run with nothing added. Read against the example above, it shows what the extra 50 was worth; read alone, it shows what a 200 a month habit costs in interest over two and a half years.

3. 5,000 at 18%, paying 75.01 a month

   1. Month one: interest = 5,000 × 0.015 = 75.00, so the payment of 75.01 reduces the balance by 0.01
   2. The balance falls by a cent, so the next month's interest is a fraction of a cent lower
   3. The reduction grows slowly at first and then accelerates as the balance finally shrinks
   4. It takes 600 payments — fifty years — to reach zero
   5. Total interest: 40,315.63 on a 5,000 balance

   One penny above the first month's interest, and it stretches the payoff to fifty years and 40,315.63 of interest on a 5,000 balance. Pay 75.00 instead — exactly the first month's interest — and the balance never falls at all, so the calculator refuses the input rather than returning a number. This is the cliff edge of every fixed-payment plan, and it is not a rare corner: a payment that feels generous in normal times can sit just above the interest line on a high-rate balance, and the difference between a five-year payoff and a fifty-year one is a rounding error in the payment. The test is worth running once on your own numbers, because the answer is not visible from the size of the payment — only from the size of the interest.

The monthly payment here is one you choose, not the minimum payment your card requires. That distinction is the first limitation: a minimum payment is a percentage of the balance, so it shrinks as the balance shrinks, and the schedule it produces is much longer than a fixed payment of the same starting size — the first month's minimum may be 200 and the fortieth month's 40. If what you actually pay is the minimum, this page will be optimistic, and the minimum payment has a page of its own. Interest is charged monthly here, at the annual rate divided by twelve, while a real card accrues daily and, once you are revolving, from each purchase's transaction date rather than from the statement date. That makes these figures a little low against a real statement, and the gap widens with the length of the payoff — the daily version is on its own page. New spending is absent, and a card you keep using is not being repaid by any fixed payment, it is being serviced: a balance that grows while you pay never clears. The rate is treated as fixed, while most cards carry a variable rate tied to a market benchmark, and a rate rise lengthens the whole schedule. Fees are absent, including annual fees and late charges, and a missed payment usually triggers a penalty rate that changes the answer completely. Nothing models a lump sum arriving partway through, which is a different and often better question. And no currency is attached to any figure: 5,000 and 200 mean whatever unit you typed.

How long does it take to pay off a credit card at a fixed monthly payment?

On 5,000 at 18%, paying 200 a month, 32 months — and 1,313.97 of interest. At 250 a month it is 24 months and 989.17. The payment and the payoff length are the same decision seen twice, which is why it is worth moving the number before committing to it rather than after.

How much does an extra payment actually save?

More than a proportional share, and less than the last one. On 5,000 at 18% with a 200 payment, adding 50 a month saves 8 months and 324.80 of interest. Adding 250 instead saves 13 months and 802.76. The early money does the most work because it lands when the balance is largest.

What is the final payment?

The last month of a fixed-payment plan is almost never the same as the others, because it only has to clear what is left. On 5,000 at 18% with a 250 payment the last month is 239.17 rather than 250; with a 200 payment it is 113.97. It matters if you are timing the payoff against something else.

Should I pay a fixed amount or whatever the minimum payment is?

A fixed amount, almost always, and the reason is structural rather than motivational: a minimum payment is a percentage of the balance, so it falls as the balance falls, and the debt approaches zero instead of arriving at it. A fixed payment has a definite end date, which is what this page computes.

Why does a tiny change in my payment change the answer so much?

Because a payment close to the monthly interest barely touches the principal, and an untouched principal keeps generating the same interest. At 18%, 5,000 charges 75.00 in the first month, so 75.01 a month takes 600 months while 300 a month takes under two years. The size of the payment tells you very little; what matters is how far above the interest line it sits.

Why is this different from my card statement?

Three reasons. Interest is charged monthly here rather than daily, so a real statement accrues slightly more. Your card charges interest from each purchase's transaction date once you are revolving, not from the statement date. And any new spending is absent here — a card you keep using cannot be repaid by any fixed payment, only serviced.

• 12 CFR 1026.7 — Periodic statement (Regulation Z): what a credit card statement must disclose, including the minimum payment and the minimum payment warning, which is what a fixed payment has to be compared against — Electronic Code of Federal Regulations, Office of the Federal Register (United States)
• G.19 Consumer Credit: the monthly series on credit card interest rates and revolving balances, which is where the rate you type comes from — Board of Governors of the Federal Reserve System (United States)