1. What is the Credit Card Payoff Calculator?

This calculator estimates how long it will take to pay off your credit card debt in the UK based on your current balance, monthly payment, and annual percentage rate (APR).

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

• \( P \) — Principal balance (GBP)
• \( D \) — Monthly payment (GBP)
• \( R \) — 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 the debt considering compound interest.

3. Importance of Payoff Calculation

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

4. Using the Calculator

Tips: Enter your current credit card balance in GBP, your fixed monthly payment amount, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if my minimum payment is too low to pay off the debt?
A: The calculator will show "∞" if your payment doesn't cover the interest charges, meaning you'll never pay off the debt at that payment rate.

Q2: Does this account for changing interest rates?
A: No, this assumes a fixed APR. If your rate changes, you'll need to recalculate.

Q3: How accurate is this calculation?
A: It's mathematically precise for fixed payments and interest rates, but doesn't account for fees, payment changes, or rate changes.

Q4: Should I include new purchases in the principal?
A: For accurate results, use the current balance and stop using the card for new purchases while paying it off.

Q5: How can I pay off my debt faster?
A: Increase your monthly payment, reduce your APR (balance transfer), or make bi-weekly instead of monthly payments.