Credit Card Payoff Calculator
Calculate how long it takes to pay off a credit card balance and how much interest you'll pay, then see how much extra payments save.
Credit card interest is among the most expensive debt a household carries. A $5,800 balance at 22.99% APR paid at the minimum ends up costing thousands more than the original balance and takes years to eliminate. Running the numbers before accepting that reality, and seeing how much extra payments change the picture, is one of the more motivating financial calculations you can do.
Paying only the minimum on a $5,800 balance at 22.99% APR takes over 20 years and costs more than the original balance in interest alone. An extra $100/month cuts both the timeline and total cost dramatically.
How credit card interest compounds
Credit card interest accrues daily using the daily periodic rate (APR ÷ 365). The balance at the end of each billing cycle includes interest on every day's balance throughout the month. This means interest accrues on interest, the definition of compound interest. At 22.99% APR, your balance grows at roughly 1.92% per month if you make no payments. On a $5,800 balance, that's $111 in new interest every month before any payment is applied.
Minimum payments and the trap
Credit card minimum payments are typically calculated as a small percentage of the balance (often 1–2%) or a flat dollar minimum, whichever is greater. These minimums are designed to keep you paying as long as possible. When the minimum is barely above the monthly interest charge, almost nothing goes to principal, the balance shrinks imperceptibly. Paying a fixed dollar amount above the minimum, or simply paying significantly more than the minimum, accelerates payoff dramatically.
The extra payment multiplier
On high-interest debt, extra payments deliver outsized returns. Every extra dollar applied to principal saves that dollar's worth of future interest, at 22.99% APR, you're earning a guaranteed 22.99% return on every dollar of early payoff. No investment reliably beats paying off high-rate credit card debt. This is why the debt avalanche strategy (paying highest-rate debt first) is mathematically optimal.
Balance transfer considerations
A 0% balance transfer promotional offer can dramatically reduce payoff cost. Transferring $5,800 to a 0% card for 18 months with a 3% transfer fee costs $174 upfront but saves all the interest that would accrue during the promotional period. The math works as long as you pay off the balance before the promotional period ends, the reversion rate afterward is often higher than the original card.
Frequently asked questions
What is the minimum payment on a credit card?
Most issuers require the greater of $25–35 or 1–2% of the statement balance. Some use a formula that includes interest plus 1% of principal. The CARD Act of 2009 requires issuers to show how long minimum-only payments take to pay off the balance on every statement, checking that disclosure is a useful reality check.
Does paying twice a month help?
Yes, slightly. Since interest accrues daily, paying twice monthly reduces the average daily balance, which reduces interest accrual. The effect is small, typically a few dollars per month, but it adds up over a multi-year payoff. More meaningfully, bi-weekly payments tend to result in one extra payment per year (26 half-payments vs 12 full payments), which accelerates payoff.
Should I pay off credit cards or build an emergency fund first?
Most financial planners recommend building a small starter emergency fund ($1,000–2,000) first, then aggressively paying high-rate debt. Without any emergency cushion, an unexpected expense forces new credit card charges, undoing payoff progress. The emergency fund breaks that cycle before you attack the balance.