1. What is the Credit Card Payoff Calculator?

This calculator estimates how long it will take to pay off credit card debt using Bankrate's methodology. It considers your principal balance, monthly payment, and annual percentage rate (APR) to calculate the payoff time.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( P \) — Principal balance ($)
• \( D \) — Monthly payment ($)
• \( R \) — Monthly interest rate (APR / 12, as decimal)
• \( T \) — Time to payoff (months)

Explanation: The formula calculates how many months it will take to pay off debt by accounting for the compounding interest on your balance.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning, debt management, and understanding the true cost of carrying credit card balances.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed monthly payment you can afford, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low to cover interest?
A: The calculator will show "Never" if your payment doesn't cover the monthly interest charges.

Q2: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments typically extend payoff time significantly.

Q3: How accurate is this calculation?
A: It's accurate for fixed payments and APR. Variable rates or changing payments would affect actual payoff time.

Q4: Should I include new purchases?
A: For accurate results, stop using the card while paying it off, or account for new charges in your balance.

Q5: How can I pay off debt faster?
A: Increase monthly payments, reduce spending, or consider balance transfer options with lower APR.