1. What is the Credit Card Payoff Calculator?

This calculator estimates how much faster you can pay off your credit card debt by making additional payments each month. It uses a logarithmic formula to account for compound interest.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

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

Explanation: The formula calculates how many months it will take to pay off debt when making regular payments plus additional payments, accounting for decreasing principal and compound interest.

3. Importance of Additional Payments

Details: Even small additional payments can significantly reduce payoff time and total interest paid. This calculator helps visualize the impact of extra payments.

4. Using the Calculator

Tips: Enter your current balance, minimum payment, any additional amount you can pay, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why make additional payments?
A: Additional payments reduce principal faster, decreasing both payoff time and total interest paid over the life of the debt.

Q2: How accurate is this calculator?
A: It provides a mathematical estimate assuming fixed payments and interest rate. Actual results may vary slightly.

Q3: Should I pay extra or save money?
A: Generally pay high-interest debt first (APR > 6-8%), but maintain some emergency savings.

Q4: What if my APR changes?
A: Recalculate with the new rate. Variable rates make payoff time estimates less certain.

Q5: What's the best strategy for paying off cards?
A: Pay highest APR cards first (avalanche method) while making minimums on others.