Credit Card Payment Calculator
Calculate credit card interest, compare payment strategies, and find out how long it will take to pay off your balance.
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Complete Guide to Credit Card Debt Payoff
Credit card debt can be one of the most expensive forms of borrowing. Understanding how interest compounds and creating a strategic payoff plan can save you thousands of dollars. Compare to other loan types with our Loan Calculator.
How Credit Card Interest Works
Unlike simple interest, credit card interest compounds daily on your average daily balance. Your APR is divided by 365 to get the daily periodic rate, which is applied to your balance each day. This means interest can add up quickly, especially with high balances.
Debt Payoff Strategies
❄️ Avalanche Method
Pay minimums on all cards, then put extra money toward the card with the highest interest rate. Mathematically optimal—saves the most money.
🔥 Snowball Method
Pay minimums on all cards, then put extra money toward the card with the smallest balance. Offers psychological wins that keep you motivated.
Tips to Accelerate Payoff
- Pay more than the minimum: Minimum payments keep you in debt for years
- Consider balance transfers: 0% APR offers can give you breathing room
- Make bi-weekly payments: This results in 26 half-payments (13 full payments/year)
- Use windfalls wisely: Tax refunds and bonuses can make a big dent
- Stop using the card: Cut it up or freeze it until paid off
Frequently Asked Questions
Why does the minimum payment barely reduce my balance?
Minimum payments are typically 1-3% of your balance or $25, whichever is greater. Most of this goes toward interest, especially early on. It can take 10+ years to pay off a balance making only minimums.
What is a good credit card APR?
As of 2024, average credit card APR is around 20-25%. "Good" rates (under 15%) are typically reserved for those with excellent credit. Secured cards may have lower rates but require a deposit.
Should I close cards after paying them off?
Usually no—closing cards reduces your available credit, which can hurt your credit score. Keep them open with a zero balance, or make a small recurring charge and pay it off monthly.
How do balance transfer cards work?
You transfer existing debt to a new card with a 0% intro APR (typically 12-21 months). There's usually a 3-5% transfer fee. Pay off the balance before the intro period ends to avoid high regular APR.