1. What is the Credit Card Payoff Formula?

The credit card payoff formula estimates how long it will take to pay off a credit card balance based on your current balance, monthly payment amount, and annual interest rate (APR). This calculation helps you understand the true cost of carrying a balance.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

• \( P \) — Principal balance (MYR)
• \( D \) — Monthly payment (MYR)
• \( R \) — Monthly interest rate (APR / 12)
• \( T \) — Time to payoff (months)

Explanation: The formula accounts for compound interest and shows how increasing your monthly payment can significantly reduce payoff time.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning and can motivate you to pay more than the minimum payment to save on interest charges.

4. Using the Calculator

Tips: Enter your current credit card balance in MYR, your planned monthly payment amount, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to exceed the monthly interest?
A: If your payment only covers the interest (or less), your balance will never decrease. The calculator will show "Never" in this case.

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

Q3: What's the best way to pay off credit card debt faster?
A: Pay more than the minimum, make payments more frequently, or consider balance transfers to lower-rate cards.

Q4: Does this work for other banks' credit cards?
A: Yes, the formula works for any credit card, though Maybank-specific rates may differ.

Q5: How can I reduce my payoff time?
A: Even small increases in monthly payments can significantly reduce payoff time and total interest paid.