Find out exactly when you'll be debt-free and the true cost of your balance.
Credit card debt is the most expensive common form of consumer debt. The average credit card APR in the US is currently above 20%, and many store cards and subprime cards charge 25–30%. At 22% APR, a $5,000 balance with minimum payments can take over 15 years to pay off and cost more in interest than the original balance — even as you make payments every month.
The reason is compound interest working against you. Interest accrues daily on your outstanding balance, and if you only pay the minimum — typically 2–3% of the balance — most of that payment goes straight to interest rather than reducing your principal. The calculator above shows you the real payoff date and total interest cost at any fixed monthly payment, giving you a clear picture of what your choices actually cost.
Credit card issuers use your Annual Percentage Rate (APR) divided by 365 to get a daily periodic rate. This rate is applied to your average daily balance each day of your billing cycle. At the end of the cycle, all accumulated interest is added to your balance.
Daily rate = 22% ÷ 365 = 0.0603% per day. Daily interest = $5,000 × 0.000603 = $3.01/day. Monthly interest = roughly $91–$93. If your minimum payment is $100, only $7–$9 of it reduces your actual balance. At that rate, it will take decades and cost thousands in interest to pay off.
Credit card companies are legally required to print on your statement how long it will take to pay off your balance making only minimum payments, and how much interest you will pay. The numbers are almost always shocking. This is by design — minimum payments are calculated to keep you in debt for as long as possible, maximizing the interest you pay.
Minimum payments are typically the greater of: a flat dollar amount (often $25–$35) or a small percentage of the balance (1–3%). As your balance falls, your minimum payment falls too — which actually slows payoff even further, since a larger fraction of each smaller payment goes to interest. The only way to break out of this cycle is to fix your payment at a higher amount and hold it there even as the minimum drops.
If the minimum is $120, pay $300 every month no matter what. As your balance falls, the minimum will drop — but your payment should not. This alone dramatically accelerates payoff.
List all your cards by balance, smallest to largest. Attack the smallest balance with every extra dollar while making minimums on the rest. When it is paid off, roll that payment to the next. The quick wins keep you motivated.
List cards by interest rate, highest to lowest. Attack the highest-rate card first. This is mathematically optimal — it costs you less total interest, though it may take longer to eliminate your first account.
Many cards offer 0% APR for 12–21 months on transferred balances, with a 3–5% transfer fee. If you can pay off the transferred balance before the promo period ends, you eliminate months of high-interest charges. Be disciplined — a 0% card that you continue charging is not a solution.
Tax refunds, bonuses, gifts — any unexpected cash should go straight to your highest-rate card. A $1,500 tax refund applied to a 22% card saves you roughly $330/year in interest, every year until the card is paid off.
Every new charge resets your progress. Until the balance is gone, treat the card as frozen. Some people literally freeze them in a block of ice; others cut them up. Whatever works for you.