Tesco Credit Card Repayment

Tesco Credit Card Repayment Formula:

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

Time to Pay Off:

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1. What is the Tesco Credit Card Repayment Calculator?

This calculator estimates how long it will take to pay off your Tesco credit card debt based on your current balance, monthly payment amount, and annual interest rate (APR).

2. How Does the Calculator Work?

The calculator uses the credit card repayment formula:

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

Where:

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

Explanation: The formula calculates how many months it will take to pay off the debt given fixed monthly payments and compound interest.

3. Importance of Repayment Calculation

Details: Understanding your repayment timeline helps with financial planning and shows how increasing payments can significantly reduce repayment time and interest paid.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed monthly amount you plan to pay, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to exceed the monthly interest?
A: If your payment only covers interest (or less), your balance won't decrease and you'll never pay off the debt.

Q2: How can I pay off my credit card faster?
A: Increase monthly payments, make bi-weekly payments instead of monthly, or transfer to a lower-interest card.

Q3: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments often start at 1-3% of balance plus interest.

Q4: What if my APR changes?
A: You'll need to recalculate. This assumes a fixed APR throughout repayment.

Q5: Are there fees not accounted for here?
A: Yes, this doesn't include late fees, overlimit fees, or other potential charges.