How is credit-card interest calculated?

Your card's APR is divided by 365 to get the daily periodic rate. That rate is multiplied by your balance every day, so interest compounds daily rather than monthly.

Why does paying only the minimum take so long?

Minimum payments are usually 1–3% of the balance or a fixed floor like $25. At high APRs, most of each minimum payment covers interest, leaving very little to reduce the principal.

Does this calculator account for new purchases?

No — it assumes you stop adding charges to the card and make a consistent monthly payment until the balance reaches zero. New purchases would increase the balance and extend the payoff timeline.

What's the best strategy to pay off credit-card debt?

Pay as much above the minimum as possible — even an extra $50/month makes a big difference. Consider the avalanche method (highest APR first) or snowball method (smallest balance first) if you have multiple cards.

Credit Card Payoff Calculator

See the true cost of credit-card debt. Enter your balance, APR, and monthly payment to find out how long payoff takes and how much interest you'll pay.

Last updated: 2026-03-07

Credit card payoff calculator

Calculation History (0)

No calculations yet. Complete a calculation to see it here.

Examples

Average Balance
$5,000 at 22.99% — $200/mo
Typical revolving balance on a rewards card with consistent $200 payments.
Payoff in ~31 months, ~$1,192 total interest
Store Card Minimum
$2,500 at 26.99% — $75/mo
Retail store card with high APR and near-minimum monthly payments.
Payoff in ~50 months, ~$1,214 total interest
Aggressive Payoff
$10,000 at 19.99% — $500/mo
Large balance with an aggressive payment strategy to minimise interest.
Payoff in ~24 months, ~$1,932 total interest

How credit-card interest works

Credit-card interest is calculated using a daily periodic rate — your APR divided by 365. Each day, that rate is applied to your current balance, so you effectively pay interest on interest (compounding).

When you make only the minimum payment, most of it covers accrued interest and very little reduces the principal. This is why a \$5,000 balance at 22.99% APR can take over 14 years to pay off with minimum payments alone.

Even a small increase in your monthly payment can dramatically cut both the time and total interest. Paying \$200 instead of the minimum on that same balance saves thousands of dollars and years of payments.

Use this calculator to see the true cost of your credit-card debt and explore how accelerating payments brings freedom faster.

Frequently asked questions

How is credit-card interest calculated?: Your card's APR is divided by 365 to get the daily periodic rate. That rate is multiplied by your balance every day, so interest compounds daily rather than monthly.
Why does paying only the minimum take so long?: Minimum payments are usually 1–3% of the balance or a fixed floor like $25. At high APRs, most of each minimum payment covers interest, leaving very little to reduce the principal.
Does this calculator account for new purchases?: No — it assumes you stop adding charges to the card and make a consistent monthly payment until the balance reaches zero. New purchases would increase the balance and extend the payoff timeline.
What's the best strategy to pay off credit-card debt?: Pay as much above the minimum as possible — even an extra $50/month makes a big difference. Consider the avalanche method (highest APR first) or snowball method (smallest balance first) if you have multiple cards.

Stop paying interest you don't need to

See how a small payment boost crushes your credit-card balance — run the numbers above and share your plan with a friend.

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Disclaimer

Calculations are estimates based on a fixed APR and consistent monthly payments. Actual results may differ due to variable rates, fees, compounding methods, or additional charges. This tool is for educational purposes and does not constitute financial advice.

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