1. What is the Credit Card Payoff Calculator?

This calculator estimates how long it will take to pay off your credit card debt when making regular monthly payments that include deposits, taking into account your interest rate.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

• \( P \) — Principal balance ($)
• \( D \) — Monthly payment including deposit ($)
• \( R \) — Monthly interest rate (APR / 12, as a decimal)
• \( T \) — Time to pay off (months)

Explanation: The equation accounts for the compounding effect of interest on your credit card balance as you make payments.

3. Importance of Payoff Calculation

Details: Knowing how long it will take to pay off your credit card helps with financial planning and understanding the true cost of carrying a balance.

4. Using the Calculator

Tips: Enter your current credit card balance, your planned monthly payment (including any additional deposits), and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if I only make minimum payments?
A: The calculator will show how long it would take with your current payment amount. Minimum payments often result in very long payoff times due to interest.

Q2: How does increasing my payment affect payoff time?
A: Even small increases in your monthly payment can significantly reduce the time to pay off your balance and the total interest paid.

Q3: What's the best strategy to pay off credit cards?
A: Pay as much as you can afford each month. Consider the debt avalanche method (paying highest interest cards first) for maximum savings.

Q4: Does this calculator account for additional charges?
A: No, it assumes you won't add new charges to the card while paying it off. Adding new charges will increase your payoff time.

Q5: What if my APR changes?
A: The calculation is based on your current APR. If your rate changes, you'll need to recalculate with the new rate.