1. What is the Credit Card Payoff Calculator?

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

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

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

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

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, debt management, and assessing the true cost of credit card debt.

4. Using the Calculator

Tips: Enter your current credit card balance in GBP, your fixed monthly payment amount, and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low to pay off the debt?
A: The calculator will show "∞" if your payment doesn't cover the monthly interest (payment ≤ principal × monthly rate).

Q2: Does this account for minimum payments?
A: No, it assumes fixed payments. Minimum payments typically extend payoff time significantly.

Q3: How accurate is this calculator?
A: It provides a good estimate but doesn't account for fees, payment changes, or rate changes.

Q4: What's the best strategy to pay off credit cards faster?
A: Pay more than the minimum, consider balance transfers to lower rates, or use the debt avalanche/snowball methods.

Q5: Should I use my statement balance or current balance?
A: Use your current balance for most accurate results, unless you're specifically modeling a planned payment.