1. What is the Credit Card Payoff Calculator?

This calculator estimates the time required to pay off credit card debt in Australia using the Money.co.uk methodology. It considers your principal balance, monthly payment, and annual interest rate.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( P \) — Principal balance (AUD)
• \( D \) — Monthly payment (AUD)
• \( R \) — Monthly interest rate (APR / 12, as a decimal)
• \( T \) — Time to payoff (months)

Explanation: The formula calculates how many months it will take to pay off your credit card debt based on your current payment amount and interest rate.

3. Importance of Credit Card Payoff Calculation

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

4. Using the Calculator

Tips: Enter your current credit card balance in AUD, your monthly payment amount in AUD, and your annual interest rate (APR). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does the calculator say my debt will never be paid off?
A: If your monthly payment is less than the monthly interest charges, your balance will grow rather than shrink.

Q2: How accurate is this calculator?
A: It provides a good estimate but doesn't account for additional charges, fees, or changes in interest rates.

Q3: What's a good monthly payment to pay off debt quickly?
A: Ideally, pay more than the minimum payment. A payment that covers interest plus some principal will reduce debt fastest.

Q4: Does this work for multiple credit cards?
A: This calculates for a single card. For multiple cards, you'd need to calculate each separately or combine balances/payments.

Q5: How can I pay off my debt faster?
A: Consider increasing monthly payments, transferring to a lower interest card, or consolidating debt with a personal loan.