1. What is the Credit Card Repayment Formula?

The credit card repayment formula calculates how long it will take to pay off credit card debt when making fixed monthly payments, taking into account the interest charged on the remaining balance.

2. How Does the Calculator Work?

The calculator uses the 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 compound interest and calculates how many months it will take for the balance to reach zero with regular fixed payments.

3. Importance of Repayment Calculation

Details: Understanding repayment timelines helps consumers make informed decisions about credit card use, payment amounts, and debt management strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, the monthly payment you can afford, and your card's annual percentage rate (APR). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my debt never get paid off?
A: If your monthly payment is less than the interest charged each month, your balance will grow rather than shrink.

Q2: What's a good monthly payment amount?
A: Pay more than the minimum payment. Ideally, pay enough to clear your balance within 3 years or less.

Q3: How does APR affect repayment time?
A: Higher APRs dramatically increase repayment time. A lower APR means more of your payment goes toward principal.

Q4: What if I make extra payments?
A: Extra payments will reduce your repayment time. Recalculate with your new payment amount to see the impact.

Q5: Does this account for fees?
A: No, this calculation only considers interest. Late fees or other charges would require additional payments.