Credit Card Interest Calculator
What this calculator does
This calculator shows you how much interest you will pay on a credit card balance over time and how long it will take to pay off your balance given your monthly payment amount. It reveals the true cost of carrying a balance and demonstrates why paying only the minimum can trap you in debt for years or even decades.
Credit card interest is one of the most expensive forms of consumer debt, with average APRs ranging from 20% to 30%. Because interest compounds on the remaining balance each month, even moderate balances can generate staggering interest charges over time. A $5,000 balance at 24% APR with minimum payments can take over 20 years to pay off and cost more in interest than the original purchase.
This tool is designed to be a wake-up call and a planning aid. By showing the difference between minimum payments and accelerated payments, it motivates smarter repayment strategies.
How to use it
- Enter your current balance (e.g. $6,500).
- Enter the card's APR (annual percentage rate, e.g. 22.99%).
- Enter your monthly payment amount (or select "minimum payment" to see that scenario).
- Review the payoff timeline, total interest paid, and total amount paid.
Formulas used
Monthly interest rate = APR / 12 Example: 22.99% / 12 = 1.916% per month
Monthly interest charge = Balance × Monthly rate Example: $6,500 × 0.01916 = $124.54
Principal paid = Monthly payment − Interest charge Example: $200 − $124.54 = $75.46
New balance = Previous balance − Principal paid This repeats each month until the balance reaches zero.
Minimum payment (typical): The greater of $25 or 1–2% of the balance plus interest. Minimums shrink as the balance drops, which is why payoff takes so long.
Examples
Example 1 — Minimum payments only: Balance = $5,000, APR = 24%, minimum = 2% of balance (at least $25). Payoff time ≈ 21 years. Total interest ≈ $8,400. You pay $13,400 for a $5,000 balance.
Example 2 — Fixed $200/month: Balance = $5,000, APR = 24%, payment = $200/month. Payoff time ≈ 33 months. Total interest ≈ $1,550. Total paid = $6,550.
Example 3 — Higher balance, aggressive payoff: Balance = $12,000, APR = 21%, payment = $500/month. Payoff time ≈ 30 months. Total interest ≈ $2,880. Total paid = $14,880.
Tips and common mistakes
- Never pay just the minimum. Minimum payments are designed to maximize the interest the card issuer earns. Even $50 extra per month can cut years off your payoff timeline and save thousands in interest.
- Understand the grace period. If you pay your statement balance in full each month, most cards charge zero interest. Interest only accrues when you carry a balance past the due date.
- Watch for compounding traps. Credit card interest compounds daily (not monthly) on most cards, meaning interest accrues on interest. The daily periodic rate is APR / 365.
- Balance transfers can help. A 0% intro APR balance transfer card can pause interest for 12–21 months, letting every dollar go toward principal. Watch for the 3–5% transfer fee and make sure you pay off the balance before the promo ends.
- Avoid cash advances. Cash advances typically carry higher APRs (often 25–30%) with no grace period—interest starts accruing immediately.
- Multiple cards? Use the avalanche method: pay minimums on all cards and direct extra money toward the card with the highest APR first.