How to use the Credit Card Payoff
- Enter the current balance and the card's APR.
- Enter your intended monthly payment.
- Compare against the minimum-only scenario shown.
- Try adding a modest fixed amount to see the effect on the payoff date.
How the calculation works
Interest accrues monthly at APR ÷ 12 on the balance, and most cards compound daily on the average balance, so carrying any balance means interest on interest. A fixed payment reduces the balance by the payment minus that month's interest, which is why a payment barely above the interest charge makes almost no progress.
Minimum payments are typically the greater of a small percentage of the balance — often 1 to 3% plus interest — or a floor amount. Because that percentage applies to a shrinking balance, the payment shrinks too, extending repayment across many years and multiplying the total cost. Paying a fixed amount rather than the shifting minimum is the single change that shortens the schedule most, since the whole reduction compounds against a falling balance.
Months = −log(1 − (balance × r) / payment) / log(1 + r), where r = APR / 12Source: Standard revolving credit amortisation; minimum payment structures per card issuer disclosure conventions.
Worked example
A 5,600 balance at 22.9% APR, paying the 2%-plus-interest minimum versus a fixed 250 a month.
- Monthly rate = 0.229 / 12 = 0.019083; first month's interest = 106.87.
- Minimum starts near 219 but falls each month as the balance drops.
- At a fixed 250: months = −log(1 − (5,600 × 0.019083)/250) / log(1.019083) ≈ 29.
- Total paid at 250 ≈ 7,250.
About 29 months and 1,650 in interest at a fixed 250, against well over a decade and several thousand more on minimums alone.
Frequently asked questions
Why do minimum payments never clear the balance?+
They are a percentage of a falling balance, so they fall too. Much of each one covers interest, leaving very little to reduce what you owe.
Does a balance transfer help?+
A 0% transfer can, if you clear the balance within the promotional window and account for the transfer fee. If it runs past the window onto a high revert rate, the saving evaporates.
Does carrying a small balance help my credit score?+
No. Paying in full each month reports the same on-time activity without any interest. Utilisation matters, but the balance need not be carried across the statement date.
Should I pay weekly instead of monthly?+
It helps slightly on cards that compound daily, because the average balance is lower. The bigger lever by far is simply paying more.
Last reviewed August 31, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.