1. What is the Credit Card Payoff Time Calculator?

This calculator compares how long it would take to pay off credit card debt under different interest rate offers in Australia. It helps consumers understand the real cost of different credit card options.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

• \( P \) — Principal balance (AUD)
• \( D \) — Monthly payment (AUD)
• \( R \) — 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 a credit card balance given a fixed monthly payment and interest rate.

3. Importance of Comparing Credit Card Offers

Details: Even small differences in APR can result in significant differences in total interest paid and time to become debt-free. This calculator helps visualize those differences.

4. Using the Calculator

Tips: Enter your current balance, the amount you can pay each month, and compare different credit card APRs. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does the calculator sometimes say "Never"?
A: If your monthly payment is less than the accrued interest, your balance will never be paid off.

Q2: Does this include fees or other charges?
A: No, this calculates based on interest only. Some cards may have additional fees.

Q3: How accurate is this calculator?
A: It provides a good estimate assuming fixed payments and interest rates. Actual results may vary slightly.

Q4: What's a good APR in Australia?
A: As of 2024, competitive rates are typically under 15%, with the best offers around 10-12%.

Q5: Should I consider balance transfer offers?
A: Yes, 0% balance transfer offers can significantly reduce payoff time if you maintain payments.