1. What is the Credit Card Payoff Calculator?

This calculator estimates how long it will take to pay off your credit card debt based on your current balance, monthly payment, and annual interest rate (APR). It uses the standard credit card payoff formula.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

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

Explanation: The formula calculates how many months it will take to pay off your credit card debt based on your current payment amount and interest rate.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning and can motivate you to increase payments to reduce interest costs.

4. Using the Calculator

Tips: Enter your current credit card balance in CAD, your planned monthly payment in CAD, and your annual interest rate (APR). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does the calculator show infinite time?
A: If your monthly payment is less than the interest accrued each month, your debt will never be paid off.

Q2: How can I pay off my credit card faster?
A: Increase your monthly payment amount or make bi-weekly payments instead of monthly ones.

Q3: Does this include minimum payments?
A: This calculator works with whatever payment amount you enter, whether it's the minimum or more.

Q4: Are there fees included in this calculation?
A: No, this calculation only considers principal and interest. Late fees or other charges would affect actual payoff time.

Q5: How accurate is this calculator?
A: It provides a good estimate assuming fixed payments and interest rates. Actual payoff may vary slightly due to rounding in real statements.