1. What is the Money Supermarket Credit Card 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 MoneySuperMarket's methodology to provide accurate results.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( P \) — Principal balance (GBP)
• \( D \) — Monthly payment (GBP)
• \( R \) — 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 the debt by accounting for the compounding interest and your fixed monthly payment.

3. Importance of Credit Card Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, budgeting, and evaluating whether you should consider balance transfer options or debt consolidation.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed amount you can pay each month, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my debt never get paid off?
A: If your monthly payment is less than the interest charged each month, your balance will grow rather than shrink. You need to pay more than the interest to reduce the principal.

Q2: How accurate is this calculator?
A: It provides a good estimate assuming you make fixed monthly payments and don't add new charges to the card.

Q3: What's the best way to pay off credit card debt faster?
A: Pay more than the minimum payment, consider a 0% balance transfer card, or look into debt consolidation options.

Q4: Does this work for multiple credit cards?
A: No, this calculates payoff for a single card. For multiple cards, you'd need to calculate each separately or consider the total combined debt and payments.

Q5: What if my APR changes?
A: The calculation assumes a fixed APR. If your rate changes, you should recalculate with the new rate.