1. What is the Credit Card Payoff Calculator?

This calculator estimates how long it will take to pay off credit card debt when making fixed monthly payments, taking into account the interest rate. It helps you understand the true cost of credit card debt and plan repayment strategies.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

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

Explanation: The formula accounts for compound interest and calculates how many months it will take for regular payments to reduce the balance to zero.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, comparing repayment strategies, and motivating debt reduction by showing concrete progress.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed monthly payment you can afford, and the card's APR. For multiple cards, calculate each separately.

5. Frequently Asked Questions (FAQ)

Q1: What if I make variable payments?
A: This calculator assumes fixed payments. For variable payments, the actual payoff time may differ.

Q2: Why does my debt never get paid off?
A: If your monthly payment doesn't exceed the monthly interest charges (D ≤ P×R), your balance will never decrease.

Q3: How can I pay off debt faster?
A: Either increase monthly payments or reduce the interest rate (through balance transfers or negotiations).

Q4: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments often extend payoff time significantly.

Q5: How accurate is this calculator?
A: It provides a good estimate but actual results may vary slightly due to billing cycles and rounding.