Why credit card debt is expensive
Credit cards charge high interest, often 18–25% per year. If you only pay the minimum, most of your payment goes to interest and the balance falls very slowly.
How this calculator works
Each month, interest is added to the balance (APR ÷ 12) and your payment is subtracted. The loop repeats until the balance reaches zero. If the payment is lower than the monthly interest, the debt can never be cleared and the tool warns you.
Strategies to pay off faster
- Pay more than the minimum, even a small extra amount.
- Avalanche: pay the highest-interest card first.
- Snowball: pay the smallest balance first for quick wins.
- Consider a balance transfer or consolidation loan with a lower rate.
- Avoid new purchases on the card while paying it off.
Frequently asked questions
What if I only pay the minimum?
It can take many years and cost far more in interest. Try increasing the payment in the calculator to see the difference.
Is APR the same as the monthly rate?
No. The monthly rate is APR divided by 12, which is what this tool uses.
Does it include new purchases or fees?
No. It assumes no new charges.