1. What is the NerdWallet Credit Card Payoff Calculator?

The NerdWallet Credit Card Payoff Calculator estimates how long it will take to pay off your credit card debt based on your current balance, monthly payment, and interest rate. It uses a logarithmic formula to provide an accurate time estimate.

2. How Does the Calculator Work?

The calculator uses NerdWallet's formula:

Where:

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

Explanation: The formula accounts for the compounding effect of interest on your remaining balance each month.

3. Importance of Credit Card Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, debt management, and evaluating different payment strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, planned monthly payment, and APR. 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 show "∞" if your payment doesn't cover the monthly interest (payment ≤ principal × monthly rate).

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

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

Q4: Does this account for minimum payments?
A: No, it assumes you'll make the same fixed payment each month until payoff.

Q5: How can I pay off my card faster?
A: Increase monthly payments, reduce spending, or negotiate a lower APR with your card issuer.