1. What is the Credit Card Compare Tool?

The Credit Card Compare Tool calculates and compares the time needed to pay off multiple credit card debts based on their balances, monthly payments, and interest rates. This helps users understand which debts will take longest to pay off and plan their repayment strategy.

2. How Does the Calculator Work?

The calculator uses this formula for each card:

Where:

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

Explanation: The formula calculates how many months it will take to pay off a credit card debt given a fixed monthly payment, accounting for compound interest.

3. Importance of Comparing Payoff Times

Details: Understanding payoff times helps prioritize which debts to pay off first (typically highest interest first) and create an effective debt repayment plan.

4. Using the Calculator

Tips: Enter accurate balances, monthly payments, and APRs for each card. The calculator shows how many months each will take to pay off at current payment levels.

5. Frequently Asked Questions (FAQ)

Q1: Should I pay off highest interest or smallest balance first?
A: Mathematically, highest interest saves most money. Psychologically, smallest balance gives quick wins. This tool helps visualize the differences.

Q2: What if my payment is less than the interest?
A: The equation won't work (you'd never pay off the debt). Payments must exceed monthly interest.

Q3: Does this account for minimum payments changing?
A: No, it assumes fixed payments. For minimum payments (which decrease), results would differ.

Q4: How accurate is this calculation?
A: Very accurate for fixed payments, but doesn't account for fees, payment changes, or new charges.

Q5: Can I compare more than 4 cards?
A: The tool currently supports up to 4 cards. For more, calculate separately and compare results.