What the interest is really doing
A credit card at 22.9% costs you a little under 2% of the balance every month. On a $5,000 balance that is roughly $95 charged before a single dollar of what you owe goes down. If your payment is $120, only about $25 of it is actually reducing the debt.
That ratio is why card balances feel stuck. It is also why extra payments work so dramatically: every extra dollar goes entirely to the balance, none of it to interest, and it reduces the interest charged in every month that follows.
The three numbers you need
Balance — what you currently owe, from your latest statement. APR — the annual interest rate on that balance. Monthly payment — what you actually pay each month, not what the card asks for as a minimum. If you only ever pay the minimum, use the minimum payment calculator instead, because that payment shrinks as the balance falls and the maths changes completely.
Making the payoff faster
The table above shows what different extra amounts do. Most people are surprised by how much work the first $25 does compared with the step from $200 to $250 — the early dollars have the longest time to compound in your favour.
Two other things worth checking: whether your card offers a lower rate for setting up autopay, and whether a 0% balance transfer is available to you. A transfer with a 3% fee that buys 18 months at 0% is usually cheaper than 18 months at 22%, but only if you clear the balance before the promotional rate expires.
Common questions
- How long will it take to pay off my credit card?
- It depends almost entirely on how much above the minimum you pay. Enter your balance, APR and monthly payment above and the calculator gives you the exact month, plus a table showing how much sooner you would finish with $25, $50, $100 or $250 more each month.
- Where do I find my APR?
- It is on your monthly statement, usually near the interest charges, and in your online account under card terms. Cards often have different rates for purchases, cash advances and balance transfers — use the purchase APR unless most of your balance came from somewhere else.
- Why does my statement show a slightly different interest charge?
- This calculator charges one twelfth of the annual rate on your balance each month. Most issuers use the average daily balance and a daily periodic rate instead, so the two differ by a small amount month to month. Over the life of the balance the totals stay close.
- Should I pay off my credit card or save first?
- A small emergency fund first — a few hundred dollars — so the next unexpected bill does not go straight back on the card. After that, a 22% card is costing you far more than any savings account pays, so the card wins.
- Will paying it off help my credit score?
- Usually yes. A large part of most scores is credit utilisation — how much of your available limit you are using. Bringing a balance down lowers utilisation, and keeping the account open afterwards keeps the limit working in your favour.