Credit Card Payoff Calculator: Debt-Free Date & Interest

This calculator estimates how long it could take to pay off credit card debt, how much interest you might pay, and what payment amount would retire your balance by a target date. The math follows industry-standard concepts: APR (annual percentage rate), a daily or monthly periodic rate, and a minimum payment policy. Many issuers compute interest using the average daily balance method and a daily periodic rate; paying in full within the grace period generally avoids interest on purchases.

Credit Card Payoff Calculator

Current balance ($)

APR (%)

APR is the yearly rate for revolving balances.

Compounding model

Issuers commonly use the average daily balance with a daily periodic rate.

Mode

Monthly payment ($)

Target payoff (months)

Minimum payment policy

% of balance or $

For disclosures, regulators often illustrate 2% or $20 (whichever is greater). Policies vary by issuer.

This is an educational estimator. Excess payment over the minimum generally goes to the highest-APR balances per Reg Z.

Estimated months to payoff—

Total interest$0

Final payment$0

Payment check—

See amortization

Month	Payment	Interest	Principal	Ending balance

How credit card APR and interest really work

APR is the yearly cost of borrowing on a revolving account. Converting APR to a periodic rate lets us model interest over time — for example, a monthly rate (APR ÷ 12) or a daily rate (APR ÷ 365). Issuers often assess interest daily on the average daily balance; any amount you pay above the minimum is generally allocated to the highest APR balances first under Regulation Z.

Key definitions (fast)

APR: annualized rate for your revolving balance.
Daily periodic rate: APR ÷ 365; applied to your daily balance in many agreements.
Average daily balance: the average of each day’s balance in the billing cycle.
Grace period: pay the statement balance on time to avoid interest on purchases.

What the calculator does (and the assumptions)

Three payoff modes: (1) Fixed payment (how long will it take?), (2) Target months (what payment do I need?), (3) Minimum-only (simulates issuer-style minimum payments over time). The “minimum” defaults to 2% of balance or $25, whichever is greater, similar to the CFPB’s sample disclosure math — adjust as needed for your issuer.
Compounding model: choose Daily (APR/365 applied over ~365/12 days per month, consistent with Appendix M2’s approach) or Monthly (APR/12). Both are educational approximations; your statement uses the contract method.
Payment allocation: If you carry multiple balances at different APRs, amounts paid above the minimum typically go to the highest APR balances first (Reg Z §1026.53). Our single-balance tool focuses on total payoff time and interest.

Formulas you can check

Monthly or “effective” periodic rate

Monthly rate ≈ APR ÷ 12; Daily rate ≈ APR ÷ 365. (Issuers commonly compute via daily periodic rate on the average daily balance.)

Payment needed to be debt-free in n months

Payment = B × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1], where B is balance and r the periodic rate. (If r = 0, simply B ÷ n.)

Interest each period

Interest ≈ Balance × periodic rate; with daily methods, issuers sum each day’s interest using the daily periodic rate.

Minimum payment math: why “minimum-only” takes so long

Statements include repayment disclosures showing how long payoff could take if you make only the minimum, and how much you’d pay if you repaid in 36 months. The CFPB’s appendices detail the calculations used for these disclosures and provide sample math (for example, a minimum set at 2% of balance or $20). Our simulator mirrors this style to illustrate the trade-off between time and interest.

Example (illustrative): Balance $6,000, APR 23.99%, fixed payment $250 → the tool estimates months to payoff, total interest, and a final small payment. Try switching to “Target months” (say, 24 months) to see the required payment and interest savings. If your fixed payment doesn’t even cover the period’s interest, the calculator flags it (negative amortization risk).

Strategy: avalanche vs. minimum-only (and why grace periods matter)

Pay more than the minimum: The more you pay, the less interest you’ll owe — statements even include a 36-month payoff example to encourage higher payments.
Avalanche method: Direct any extra dollars to your highest APR debt while paying minimums on others; Reg Z also applies your payments above the minimum to higher-APR balances.
Use your grace period: If you can pay the statement balance in full by the due date, you generally avoid interest on purchases; miss it and interest typically accrues from the end of the cycle until you regain grace by paying in full again.

Balance transfers: powerful when the math works

Introductory 0% APR balance transfer offers can slash interest while you pay down principal — but most cards charge a one-time transfer fee (often 3%–5% of the amount transferred). Check your offer’s fee and intro period, and avoid new purchases that could lose their grace period.

Reading your results

Output	What it means
Months to payoff	How long until the balance reaches $0 under your payment plan.
Total interest	Sum of all interest charges until payoff (no new purchases assumed).
Final payment	Often a smaller last payment once the balance is nearly zero.
Payment check	Warns if your payment is below interest for the period (negative amortization).

Methodology & disclosures

Interest model: You can toggle daily (APR/365 applied over ~365/12 days per month per CFPB sample) or monthly (APR/12). This is an educational approximation of the average daily balance method used by many issuers.
Minimum payment simulation: Default is 2% of balance or $25, editable to match your issuer. CFPB sample calculations often use 2% or $20; issuer formulas vary and may include interest/fees components.
Allocation of payments: Under Reg Z, amounts above the minimum generally go to the highest APR balances first.
No advice: Educational tool only; confirm exact charges on your statement and card agreement.

Frequently Asked Questions (FAQs)

Is APR fixed or variable?

Many credit cards have a variable APR that moves with an index; some use a fixed APR. Check your agreement or recent statement to confirm which you have.

What’s a “good” APR in 2025?

There’s no single “good” APR — rates vary widely by credit profile and product. For context, the Federal Reserve’s G.19 release reports average APRs across issuers; your actual APR depends on your creditworthiness and card type.

Can I avoid interest?

Yes: if you pay the statement balance in full by the due date and your card offers a grace period on purchases, you typically avoid interest on those purchases.

Sources