Credit Card Payoff Comparison Calculator

Payoff Time Formula:

\[ T = \frac{\log\left(\frac{P}{P - D \times R}\right)}{\log(1 + R)} \]

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1. What is the Credit Card Payoff Comparison Calculator?

The Credit Card Payoff Comparison Calculator helps you compare how long it will take to pay off multiple credit card debts based on your current balances, monthly payments, and interest rates.

2. How Does the Calculator Work?

The calculator uses the following formula for each credit card:

\[ T = \frac{\log\left(\frac{P}{P - D \times R}\right)}{\log(1 + R)} \]

Where:

$ P $ — Principal balance ($)
$ D $ — Monthly payment ($)
$ R $ — Monthly interest rate (APR / 12, as a decimal)
$ T $ — Time to payoff (months)

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

3. Importance of Payoff Time Calculation

Details: Understanding payoff timelines helps with debt management strategies, comparing different payment approaches, and planning your financial future.

4. Using the Calculator

Tips: Enter the number of cards you want to compare, then for each card enter the current balance, your monthly payment, and the APR. The calculator will show you how long each card will take to pay off.

5. Frequently Asked Questions (FAQ)

Q1: What if my monthly payment is less than the interest?
A: The formula requires that your payment exceeds the monthly interest (D > P×R). Otherwise, the debt would never be paid off.

Q2: Does this account for minimum payments changing?
A: No, this assumes a fixed monthly payment. If you pay only the minimum (which typically decreases as balance decreases), payoff time would be longer.

Q3: How accurate is this calculator?
A: It provides a mathematical estimate assuming no additional charges and fixed interest rates. Actual payoff may vary slightly due to rounding in real billing.

Q4: Should I focus on highest APR or largest balance first?
A: The "avalanche method" (highest APR first) saves the most interest, while the "snowball method" (smallest balance first) provides psychological wins.

Q5: Can I see how extra payments affect payoff time?
A: Yes, simply increase the monthly payment amount for a card to see how much faster it would be paid off.