Credit card payoff calculator

Why minimum payments keep a balance alive

A credit card charges interest on whatever balance is still standing, and the charge is steep: at a 24% APR, every $1,000 carried costs about $20 a month before it shrinks by a cent. A fixed payment works because the interest slice gets smaller as the balance falls, so more of the same payment reaches the balance each month. A minimum payment does the opposite: it is usually set as a small percentage of the balance, so it falls as the balance falls, stretching the debt across years and multiplying the interest.

The warning built into this calculator matters more than the headline number. If a payment does not cover one month of interest, the balance never falls at all; it grows. On the default figures here, $5,000 at 24% APR needs more than $100 a month just to stand still. At $200 a month the balance clears in 36 months, the last payment being only a few cents. Raise the deadline instead, and the second mode shows the payment a target date actually requires, which is often the more useful number when a 0% transfer offer is about to expire.

Two habits change the result more than any trick. Paying more than the minimum, by any amount, shortens the schedule every single month. And stopping new spending on the card being paid off matters as much as the payment itself, because fresh charges restart interest on a balance that was supposed to be shrinking.

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Estimates only. Issuers compound interest daily and fees or new charges change real payoff dates; this tool is not financial advice.