How the payoff is worked out
Each month, interest of APR ÷ 12 is added to the balance and then your payment is taken off. This repeats until the balance reaches zero. In goal mode, the calculator uses the standard loan payment formula and rounds the payment up to the cent, then checks it pays off within your goal.
| Balance at 18% APR | Pay $100 a month | Pay $200 a month | Pay $300 a month |
|---|---|---|---|
| $2,000 | 2 years | 11 months | 8 months |
| $5,000 | 7 years 10 months | 2 years 8 months | 1 year 8 months |
The minimum payment trap
Card minimums are often set at 1% of the balance plus that month’s interest, with a floor such as $25 in the US or £5 in the UK. Issuers use different formulas, so check your statement; US statements also show how long paying only the minimum would take. Paying a fixed amount above the minimum, even a small one, cuts years and interest.
Ways to pay it off faster
- Pay a fixed amount every month instead of the falling minimum.
- Add any extra money, such as a refund or bonus, directly to the card.
- Ask the issuer for a lower APR, or compare a 0% balance transfer, checking the transfer fee and when the promotional rate ends.
- Have more than one card? Use the debt payoff calculator to compare the snowball and avalanche methods.