1. What is the Credit Card Payoff Calculator?

This calculator compares how long it will take to pay off credit card debt under different offers by calculating the time required to pay off each card based on balance, payment amount, and interest rate.

2. How Does the Calculator Work?

The calculator uses the payoff time 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 a credit card balance given fixed monthly payments and interest rate.

3. Importance of Comparing Payoff Times

Details: Comparing payoff times helps you understand which credit card offer will cost you less in interest and help you become debt-free faster.

4. Using the Calculator

Tips: Enter the current balance, planned monthly payment, and APR for each card you want to compare. The calculator will show how many months each will take to pay off.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to be higher than the interest?
A: If your payment only covers the interest (or less), you'll never pay off the principal balance.

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

Q3: Should I include minimum payments?
A: You can, but to pay off debt faster, consider payments higher than the minimum.

Q4: What if I have multiple cards?
A: You can compare two at a time with this calculator. For more, consider a debt repayment calculator.

Q5: Does this account for balance transfers?
A: No, this calculates payoff time for existing balances. For balance transfer offers, you'd need to account for transfer fees and promotional rates.