1. What is the Credit Card Payoff Calculator?

This calculator determines how long it will take to pay off your credit card debt in Australia when making fixed monthly payments, taking into account your interest rate.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

• \( P \) — Principal balance (AUD)
• \( D \) — Monthly payment (AUD)
• \( R \) — Monthly interest rate (annual rate / 12, as decimal)
• \( T \) — Time to payoff (months)

Explanation: The formula calculates how many months it will take to pay off the debt based on your current balance, monthly payment amount, and interest rate.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning and shows the true cost of carrying credit card debt. Even small increases in monthly payments can significantly reduce payoff time.

4. Using the Calculator

Tips: Enter your current credit card balance in AUD, your fixed monthly payment amount in AUD, and your annual interest rate as a percentage. 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 doesn't exceed the monthly interest charges (D ≤ P × R), your balance will never decrease.

Q2: How can I pay off my credit card faster?
A: Increase your monthly payment amount, even by a small amount. Consider balance transfer options with lower interest rates.

Q3: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments typically extend payoff time significantly as they're often mostly interest.

Q4: Are there fees included in this calculation?
A: No, this only considers principal and interest. Late fees or other charges would affect actual payoff time.

Q5: Is this calculator specific to Australia?
A: While the formula works universally, it's presented with AUD currency and considers common Australian credit card terms.