1. What is the Credit Card Payoff Calculator?

This calculator determines how long it will take to pay off your Visa credit card debt in Canada based on your current balance, monthly payment, and interest rate.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( P \) — Principal balance (CAD)
• \( D \) — Monthly payment (CAD)
• \( R \) — Monthly interest rate (annual rate / 12, as a decimal)
• \( T \) — Time to pay off (months)

Explanation: The formula calculates the number of months required to pay off credit card debt when making fixed monthly payments.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, budgeting, and evaluating the true cost of credit card debt.

4. Using the Calculator

Tips: Enter your current Visa card balance in CAD, your planned monthly payment in CAD, and the annual interest rate. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low to pay off the debt?
A: The calculator will warn you if your payment is less than the monthly interest, meaning the debt will never be paid off.

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 mathematically precise for fixed payments and interest rates, but doesn't account for fees or rate changes.

Q4: Should I include new purchases in the balance?
A: For accurate results, use only the current balance you want to pay off, excluding new purchases.

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