Paying a fixed amount off a credit card each month clears it eventually — but “eventually” depends enormously on how far above the interest you pay. Enter your balance, APR and monthly payment above to see how long it takes and what it costs.
Key terms
- Balance — what you currently owe.
- APR — the annual percentage rate. Divided by twelve, it gives the monthly rate the card charges.
- Minimum payment — the smallest amount your issuer will accept, usually a small percentage of the balance. Paying it is enough to stay in good standing, and little else.
How it works
Each month the card adds interest on what you owe, and your payment comes off the total. Whatever is left carries into the next month and is charged interest again.
Each month
interest = balance × (APR ÷ 12) then balance = balance + interest − payment
Repeated until the balance reaches zero. The final payment is usually a partial one, which is why this is worked month by month rather than with a single formula.
The consequence is stark. A $5,000 balance at 18% paying $100 a month takes 94 months — nearly eight years — because $75 of that first $100 goes straight to interest. Raise the payment to $150 and it clears in about four years, at roughly half the interest. The payment is not linear in its effect: every extra dollar above the interest works much harder than the dollar before it.
The payment that never clears anything
If your payment is smaller than the month’s interest, the balance grows despite paying. At 24% on $5,000 the interest alone is $100 a month, so paying $50 leaves you further behind every month, indefinitely. The calculator says so directly rather than reporting an enormous number of months.
This is why minimum payments deserve suspicion. They are typically set close to the interest plus a small slice of principal, which by design clears the balance slowly.
How to use this calculator
- Enter the balance you owe now.
- Enter the APR from your statement. Purchases and cash advances often carry different rates; use the one that applies to this balance.
- Enter what you can pay each month, then try raising it by a small amount and watch both numbers move.
- Open the month-by-month table to see when interest stops dominating the payment.
Frequently asked questions
Why does paying a little extra help so much?
Because interest takes its cut first. Once the month’s interest is covered, every additional dollar reduces the balance, which reduces next month’s interest, which frees more of the following payment. The effect compounds in your favour.
Does this assume I stop using the card?
Yes. New purchases are not included. If you keep spending on the card, the payoff will take longer than shown.
Is interest really charged monthly?
Most issuers calculate interest daily on the average daily balance and apply it once per statement, which comes out very close to a monthly calculation but not identical to the cent. Expect small differences from your statement.
What about a promotional 0% period?
Set the APR to zero for the months it runs, but remember the rate reverts afterwards. A more careful approach is to work out what balance remains when the promotion ends, then run that figure again at the standard rate.
Should I pay the card down or save the money?
As arithmetic, paying down a debt is a guaranteed return equal to its interest rate, and card rates are usually far above what savings pay. A small emergency buffer first is widely recommended, but this is general information rather than advice for your circumstances.
