Time to Pay Off Credit 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 a credit card balance when making fixed monthly payments, accounting for compound interest.

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.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, debt management, and evaluating different payment strategies.

4. Using the Calculator

Tips: Enter your current balance, planned monthly payment, and APR. The payment must be greater than the monthly interest (balance × APR/12).

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to exceed the interest?
A: If your payment only covers interest, you'll never pay down the principal balance.

Q2: How can I pay off my card faster?
A: Increase monthly payments, reduce spending on the card, or transfer to a lower APR card.

Q3: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments typically extend payoff time significantly.

Q4: What if I make additional payments?
A: Extra payments will reduce payoff time. Recalculate with higher payment amounts.

Q5: Are there limitations to this calculation?
A: It assumes fixed APR and payments, no additional charges, and doesn't account for fees.