Estimate how much you need to pay each month to become debt-free.
Repaying your card statement’s monthly minimum can keep your account in good standing. But without contributing more, it could take years to pay down your balance to zero. Long term, it could even lead to ongoing credit card debt and steep unnecessary interest.
Use our calculator to estimate how long you’ll need to pay off your debt based on minimum payments and your payoff goals.
How to use our credit card repayment calculator
We’ve designed our calculator to help you determine three key points to paying off your debt, all to help you learn how the amount you choose to pay monthly affects your overall interest and payoff goals.
- Set up your credit card balance details. Enter how much you owe and your interest rate to see how much you’re paying in interest each month.
- Adjust your monthly repayments. Start by entering your statement’s minimum to learn how long it’d take you to pay off your balance in full. Then increase the payment amount to see how much you time you can shave off by sending more.
- Narrow down a payoff goal. Enter your ideal payoff time frame in months to see how much you’d have to send monthly to reach that goal. Adjust your goal until the monthly payment also matches your budget.
Note that our calculator works only if you commit to making no new purchases on the card you’re trying to pay off, and it doesn’t include compound interest. Adding to your balance will likely increase your monthly repayments, overall interest and time to pay it off.
Credit card repayment and interest calculator
How is credit card interest calculated?
Unlike other forms of credit that charge simple interest, credit cards accrue compound interest:
- Simple interest. Interest is charged as a fixed percentage on the principal — or the amount you borrowed initially. Regardless of how much you pay, you pay less interest on your next repayment statement as long as you haven’t added to your balance in the meantime.
- Compound interest. Interest is charged as a fixed percentage on both the principal and any interest charges you racked up in the meantime. If you’re not making large enough payments each month, you could end up paying yet more interest on your next bill — effectively paying interest on interest carried across months.
What’s the minimum I need to pay on my credit card?
Credit card companies make a lot of money on the interest you pay them. And so, they sets minimum monthly repayments that make it worth their time, ranging from 2% to 3% of your closing balance and all the way up to 10%, in some cases.
Here’s what you could pay with popular credit card issuers:
- American Express. The greater of $35 or 1% of your closing balance.
- Bank of America. The greater of $25 or 1% of your closing balance.
- Capitol One. The greater of $25 or 1% of your closing balance.
- Chase. The greater of $10 or 2% of your closing balance.
- Citi. The greater of $30 or 2% of your closing balance.
- Synchrony. The greater of $25 or 1% of your closing balance.
- USAA. The greater of $15 or 1% of your closing balance.
- U.S. Bank. The greater of $30 or 1% of your closing balance.
- Wells Fargo. The greater of $35 or 2% of your closing balance.
What happens if I repay only my statement’s minimum?
By repaying only the minimum monthly payment required, you end up contributing more of your money to the credit card issuer’s bottom line while chipping away at only a small percentage of your overall credit card debt. Because you’re charged compound interest on your credit card debt, you could end up paying interest on interest, ballooning your original principal over months.
In addition to the unnecessary interest you’ll end up paying back, it could take many years to clear your debt. If you continually carry a balance that takes up a large portion of your overall card limit, it might also negatively affect your credit score.
Work to pay off your balance in full or clear as much of the debt you can each month to minimize interest costs.
How to maximize repayments.
Let’s say you’ve racked up $5,000 on a credit card with a 15% interest rate. Your last statement’s minimum was $100 — or the greater of $20 or 2% of your closing balance. But you’re looking to work out the most efficient way to pay down the debt.
You think you can afford $250 each month. Using finder.com’s calculator, you learn how much time and simple interest you can save by increasing your monthly repayment.
|Minimum repayments||Higher repayments|
|Credit card balance||$5,000||$5,000|
|Monthly repayment amount||$100||$250|
|Total time to pay off principal||6.5 years||2 years|
|Amount you save||—||$6,456.05|
You’d save a massive $6,456.05 in unnecessary interest on your principal with a higher repayment of $250, paying off your debt 4.5 years early.
What can I do if I’m struggling to repay my debt?
If accumulating interest is keeping you from paying off your credit card debt, consider a 0% balance transfer credit card. These cards allows you to transfer your debt to a card offering no or low interest for a promotional period.
You’ll still need to pay more than the minimum repayment to completely pay off your debt before the revert rate applies. But because you’ll pay more up front, you’ll pay less overall interest over the life of the promo — and you’ll pay off your debt faster.
Note when the introductory offer ends so that you can be back on track before the revert rate kicks in.