Bankrate Credit Card Calculator

Credit Card Payoff Formula:

\[ T = \frac{\log\left(\frac{P}{P - D \times R}\right)}{\log(1 + R)} \]

Time to Payoff:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Credit Card Payoff Calculator?

The Bankrate Credit Card Calculator estimates how long it will take to pay off credit card debt based on your current balance, monthly payment, and interest rate. It uses the standard logarithmic formula for loan payoff calculations.

2. How Does the Calculator Work?

The calculator uses the following formula:

\[ T = \frac{\log\left(\frac{P}{P - D \times R}\right)}{\log(1 + R)} \]

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 by accounting for the compounding interest and the portion of each payment that goes toward reducing the principal.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning, understanding the true cost of credit card debt, and motivating debt repayment strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed monthly payment you can afford, and your card's APR. The calculator will show how long it will take to become debt-free.

5. Frequently Asked Questions (FAQ)

Q1: What if I can't pay the minimum payment?
A: If your payment is less than the interest accrued each month, your debt will grow rather than shrink. Consider debt consolidation or credit counseling.

Q2: How accurate is this calculator?
A: It provides a good estimate assuming fixed payments and interest rates. Actual results may vary if these change.

Q3: What's the fastest way to pay off credit card debt?
A: Pay more than the minimum, target highest-interest cards first (avalanche method), or consider balance transfers to lower-rate cards.

Q4: Does this work for other types of loans?
A: The formula applies to any fixed-rate installment debt, though mortgages often have different payment structures.

Q5: How does compound interest affect my payoff?
A: Early in repayment, most of your payment goes toward interest. As principal decreases, more goes toward paying down the balance.