1. What is the Credit Card Payoff Calculator?

This calculator estimates how long it will take to pay off credit card debt based on your current balance, monthly payment, and annual percentage rate (APR). It uses Bankrate's methodology to provide accurate results.

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 the debt given the compounding interest and your fixed monthly payment.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning and debt management. It shows the impact of different payment amounts on your debt-free date.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low?
A: If your payment doesn't cover the monthly interest, the calculator will show that your debt will never be paid off with that payment amount.

Q2: Does this include fees?
A: No, this calculation only considers your principal balance and interest charges.

Q3: How accurate is this estimate?
A: This provides a mathematical estimate assuming fixed payments and interest rates. Actual results may vary slightly due to rounding in real statements.

Q4: What's the fastest way to pay off debt?
A: Increase your monthly payment amount or transfer to a lower-interest card to reduce payoff time.

Q5: Should I pay more than the minimum?
A: Yes, paying only the minimum will result in much longer payoff times and higher total interest paid.