Credit Card Payoff Calculator
Find out how long it takes to clear a credit card balance at a fixed monthly payment, and how much of every payment is interest versus principal.
Time to pay off
32 months (2.6 years)
- First-month interest charge
- £75.00
- Months to pay off
- 32
- Total interest paid
- £1,313.60
- Total amount paid
- £6,313.60
A credit card charges interest each month on the remaining balance. Your payment first covers that interest, and only what is left chips away at the principal. The higher your payment relative to the monthly interest charge, the faster the balance falls and the less total interest you pay over the life of the debt.
How to use this calculator
Enter your current credit card balance, the card's annual interest rate (APR — printed on every statement and on the issuer's website), and the monthly payment you can commit to. The calculator returns the number of months to clear the debt, the total interest you would pay over that period, and a sanity check on the first month's interest charge so you can see how much of your first payment actually goes to principal.
How the calculation works
A credit card balance is a revolving loan compounded monthly at r = APR/12. Holding payment P constant, the closed-form payoff time is n = −log(1 − B·r / P) / log(1+r) months, where B is the starting balance. Total interest paid is simply P·n − B. If P is less than or equal to B·r — your payment does not even cover the first month's interest — the balance grows rather than shrinks and the loan never pays off. This is the "minimum payment trap": carriers often set minimum payments to roughly 1–3% of the balance, which on a high-APR card can be barely above the interest charge, dragging payoff out for decades.
Worked example
Balance 5,000 at 18% APR with a 200 monthly payment. Monthly rate r = 0.015, so the first month's interest is 5,000 × 0.015 = 75 — meaning only 125 of the first 200 payment goes to principal. The closed-form gives n = −log(1 − 75/200) / log(1.015) ≈ 31.6 months, or about 2 years 8 months. Total paid is roughly 6,313 and total interest about 1,313. Bump the payment to 300 and the same debt clears in 19 months with about 768 in interest — a 545 saving for an extra 100 a month.
Frequently asked questions
Why does a small monthly payment take so long to clear a credit card?
Because credit card APRs are high — typically 18–25% — and interest is charged each month on whatever balance remains. If you pay only the minimum (often 1–3% of the balance), most of that goes straight to the month's interest charge and only a sliver chips at the principal. The next month, the balance is barely lower, the interest is almost the same, and the cycle repeats. On a 5,000 balance at 22% APR, paying only the 2% minimum can take over 30 years to clear and cost more in interest than the original balance. Paying a fixed amount each month (rather than a percentage of the falling balance) finishes the debt dramatically faster.
What is the "minimum payment trap"?
Card issuers set the monthly minimum payment at roughly the interest charge plus 1% of principal. On a high-APR card with a large balance, that minimum is barely above the monthly interest, so it cuts very little principal off the balance — and because the minimum re-calculates each month as a percentage of the falling balance, it shrinks alongside it. The result: paying only the minimum can take decades to clear what looks like a manageable debt. Both the US CARD Act and the UK FCA require statements to display how long minimum-only payments would take, precisely because the answer is usually shocking.
Is it better to pay off the highest-APR card or the smallest balance first?
Mathematically, the "avalanche" method — paying minimums on every card and throwing every extra pound or dollar at the highest-APR card — saves the most interest, because that is the balance compounding fastest. The "snowball" method — clearing the smallest balance first regardless of rate — pays more interest in total but produces visible wins quickly, which research shows helps people stick with the plan. If you have the discipline either way, choose avalanche; if motivation is the bigger barrier, snowball is fine. Use this calculator on each card individually to model both.
Does my APR include the fees and interest the card charges me?
APR by definition is the annualised interest rate, not a total cost figure — it excludes annual fees, late fees, balance transfer fees, and foreign transaction charges. For a payoff calculation that is fine, because those fees do not compound the way interest does. Use the purchase APR from your statement for everyday balances; use the cash advance or balance transfer APR if your balance is from one of those sources, because they are usually higher and start accruing immediately with no grace period.
Will a balance transfer to a 0% card actually save me money?
It can, if the maths and the discipline both work. A 0% balance transfer (sometimes 12–24 months in the US, 18–34 months in the UK) usually carries a 3–5% transfer fee. Compare that one-off fee against the interest you would otherwise accrue during the 0% window — for most balances over a few thousand at a normal APR, the transfer wins. Two big traps: (1) any new spending on the new card may accrue interest from day one, and (2) the rate jumps back to a high APR the day the 0% period ends, so plan to clear the balance inside the window. Run this calculator with the standard APR set to your post-promo rate to see what happens if you do not.
How is credit card interest calculated each day vs each month?
Card issuers in both the US and UK typically use the "average daily balance" method: they apply the daily periodic rate (APR/365) to each day's balance, then sum to produce that month's interest charge. The closed-form payoff formula used here applies the equivalent monthly rate (APR/12) once per month, which is a very close approximation — the answer is correct within a fraction of a month for any realistic balance and APR. If you carry a balance that pays no grace period (e.g. a cash advance), interest starts accruing the day the transaction posts, not at the statement cutoff.