See how long it takes to pay off your credit card and how much interest you'll save
Most credit card issuers calculate the minimum payment as either a percentage of your balance (typically 1-3%) or a fixed dollar amount (usually $25-$35), whichever is greater. This calculator uses the standard formula: max(1% of balance, $25). As your balance decreases, your minimum payment also decreases — which is why paying only the minimum can take decades to clear the debt.
Credit cards have very high interest rates (often 20-25% APR). When you pay only the minimum, most of your payment goes toward interest rather than principal. On a $6,500 balance at 21.99% APR, paying the minimum takes over 7 years and costs more than $5,000 in interest alone. This is why financial experts always recommend paying more than the minimum.
Two popular methods: Avalanche method — pay extra toward the card with the highest APR first (saves the most money). Snowball method — pay extra toward the smallest balance first (quick wins build momentum). Mathematically, the avalanche method saves more interest. If you have multiple cards, list them by APR and put extra toward the highest one while making minimums on the rest.
A balance transfer moves your existing credit card debt to a new card with a 0% introductory APR (typically 12-21 months). This can save thousands in interest, but watch for: (1) balance transfer fees (usually 3-5% of the transferred amount), (2) the regular APR after the intro period, (3) whether you can pay off the full balance before the intro period ends. If you can't pay it off in time, you may end up worse off.
Use this calculator: switch to "Fixed Monthly Payment" and adjust the amount until the payoff time shows about 24 months. As a rule of thumb, paying 2-3% of your balance each month clears most credit card debt in 2-3 years. For a $6,500 balance at 22% APR, you'd need to pay about $330/month to be debt-free in 2 years.
No. This is a common myth. Carrying a balance from month to month does not improve your credit score — it just costs you interest. Your credit utilization ratio (balance / credit limit) matters, but you can pay the full statement balance every month and still have a low utilization reported. Paying in full every month is the best strategy for both your credit score and your wallet.
Missing a payment has serious consequences: (1) late fees of $30-$41, (2) penalty APR as high as 29.99%, (3) negative mark on your credit report that stays for 7 years, (4) potentially losing your 0% intro APR if you have one. Set up auto-pay for at least the minimum payment to avoid these consequences.