1. What is the Credit Card Payoff Calculator?

This calculator compares how long it will take to pay off two different credit cards based on their balances, monthly payments, and interest rates. It helps you understand which debt to prioritize for faster payoff.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

• \( P \) — Principal balance (currency unit)
• \( D \) — Monthly payment (currency unit)
• \( R \) — Monthly interest rate (APR / 12, as a decimal)
• \( T \) — Time to payoff in 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 Comparing Payoff Times

Details: Comparing payoff times helps you understand which credit card debt is costing you more in interest and should be prioritized in your debt repayment strategy.

4. Using the Calculator

Tips: Enter the current balance, your planned monthly payment, and the APR for each card. The calculator will show you how long each will take to pay off.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to be above a certain amount?
A: If your monthly payment doesn't cover the interest (D ≤ P × R), you'll never pay off the debt as the balance will grow or stay the same.

Q2: Should I always prioritize the card with longer payoff time?
A: Not necessarily. The "debt avalanche" method prioritizes higher interest rates, while "debt snowball" prioritizes smaller balances.

Q3: How accurate is this calculator?
A: It assumes fixed payments and interest rates. Real-world factors like changing rates or minimum payments may affect actual payoff time.

Q4: What if I can't make the calculated payment?
A: Consider balance transfer cards or debt consolidation to lower interest rates and make payoff more manageable.

Q5: Does this account for minimum payments?
A: No, it assumes fixed payments. Minimum payments typically extend payoff time significantly.