Pay Off Card Calculator

Credit Card Payoff Formula:

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

Time to Pay Off:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Credit Card Payoff Formula?

The credit card payoff formula calculates how long it will take to pay off credit card debt when making fixed monthly payments, accounting for compound interest. It provides an accurate estimate of the payoff timeline.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

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

Where:

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

Explanation: The formula accounts for the compounding effect of interest on your remaining balance each month, showing how fixed payments reduce both principal and interest over time.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, comparing payment strategies, and motivating debt repayment. It shows the real cost of making only minimum payments.

4. Using the Calculator

Tips: Enter your current credit card balance, your planned monthly payment amount, and your card's APR. The payment must exceed the monthly interest charge to eventually pay off the debt.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to exceed the interest charge?
A: If your payment only covers interest, your principal never decreases and you'll never pay off the debt. Payments must cover interest plus some principal.

Q2: How can I pay off my card faster?
A: Increase monthly payments, reduce spending to free up more money for payments, or transfer to a lower-interest card (if fees make sense).

Q3: Does this account for minimum payments?
A: Yes, but minimum payments often barely cover interest. This calculator shows how much faster you can pay off by paying more than the minimum.

Q4: What if my APR changes?
A: The calculation assumes a fixed APR. For variable rates, this provides an estimate based on current rates.

Q5: Are there any fees included?
A: This calculates interest only. Late fees or other charges would require additional payments to pay off.