How it works
Each month, interest accrues on the unpaid balance: interest = balance × (APR / 12). Your payment first covers interest, the rest reduces principal.
The calculator iterates month by month, applying interest then your payment, until the balance reaches zero.
What to know
- Minimum payments are a trap. They are designed to keep you in debt. A $5,000 balance at 22% APR with minimum payments takes 17 years and $7,000 in interest.
- Doubling the minimum cuts payoff time by ~70%. Same balance with $200/month vs $100/month: ~3 years vs ~13 years.
- Consider a balance transfer. 0% intro APR cards (12 to 21 months) let 100% of payments hit principal. Transfer fee is usually 3 to 5%.
- Stop using the card. Compounding new charges with paying off old ones is a treadmill.
Worked example
$8,000 balance at 22% APR with $300 monthly payment:
- Months to payoff: ~33 (about 2.7 years)
- Total interest paid: ~$1,950
- Total paid: ~$9,950
Bumping the payment to $400 cuts payoff to ~24 months and saves ~$650 in interest.
Frequently asked questions
Why does paying minimum take so long?
Minimum payments are typically 1 to 3% of the balance, just barely above the interest charge. Almost nothing goes to principal, so the balance barely moves.
Should I do snowball or avalanche?
Avalanche (highest APR first) saves the most interest. Snowball (smallest balance first) gives motivational wins faster. Both work. Pick the one you will actually stick with.
Is a balance transfer worth the fee?
If you can pay off the balance during the 0% intro period, yes. A 3% transfer fee on $5,000 is $150 — you save that much in 2 to 3 months at typical APRs.
Does carrying a balance help my credit score?
No. Paying in full each month is fine. The myth that you "build credit" by carrying a balance costs Americans billions in unnecessary interest each year.