Credit Card Repayment Calculator Australia Tax

Credit Card Repayment Formula:

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

Principal Balance (P):

AUD

Monthly Payment (D):

AUD

Annual Interest Rate (APR):

GST Rate:

Time to Pay Off:

Total Interest:

GST on Interest:

Total Cost with Tax:

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1. What is the Credit Card Repayment Calculator?

This calculator estimates how long it will take to pay off your credit card debt in Australia, including the impact of GST on the interest portion of your payments. It helps you understand the true cost of carrying credit card debt.

2. How Does the Calculator Work?

The calculator uses the following formulas:

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

Where:

\( P \) — Principal balance (AUD)
\( D \) — Monthly payment (AUD)
\( R \) — Monthly interest rate (APR / 12, as decimal)
\( T \) — Time to pay off (months)
\( I \) — Interest portion (AUD)
Tax Rate — GST rate (e.g., 10%, as decimal)

Explanation: The formula calculates how many months it will take to pay off the debt given regular payments, then calculates the GST on the interest portion.

3. Importance of GST on Credit Card Interest

Details: In Australia, GST applies to credit card interest charges. This calculator helps you understand the full cost of your debt including this tax.

4. Using the Calculator

Tips: Enter your current credit card balance, your planned monthly payment amount, the card's annual interest rate (APR), and the current GST rate (default is 10%). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why is GST charged on credit card interest?
A: In Australia, financial services including credit card interest are subject to GST as they're considered taxable supplies.

Q2: How accurate is this calculator?
A: It provides a good estimate assuming fixed interest rates and consistent monthly payments. Actual results may vary slightly.

Q3: What if I make additional payments?
A: Additional payments will reduce your payoff time and total interest. Recalculate with your new payment amount.

Q4: Does this include other fees?
A: No, this calculator only considers principal, interest, and GST on interest. Annual fees or other charges are not included.

Q5: How can I pay off my card faster?
A: Increase your monthly payment, reduce your interest rate (consider balance transfers), or make bi-weekly instead of monthly payments.