Credit Card Payoff Calculator

Calculate Payoff

Description

How to Use

1. Enter your current credit card balance in the "Current Balance" field.
2. Enter the annual interest rate of your credit card in the "Annual Interest Rate" field.
3. Enter the amount you can pay each month in the "Monthly Payment" field.
4. Click the "Calculate Payoff" button to see the results, including the time required to pay off your balance and the total interest paid.

How to Calculate Credit Card Payoff Manually

To calculate credit card payoff manually, follow these steps:

1. Convert the annual interest rate to a monthly rate by dividing it by 12: monthly rate = annual rate / 12.
2. Determine the monthly interest by multiplying the current balance by the monthly rate: monthly interest = balance * monthly rate.
3. Calculate the monthly principal payment by subtracting the monthly interest from the monthly payment.
4. Subtract the monthly principal payment from the current balance to get the new balance.
5. Repeat the above steps until the balance is paid off.
6. Count the number of months taken and calculate the total interest paid.

Example

Suppose you have a balance of $1,000 with an annual interest rate of 18% and a monthly payment of $50:

1. Monthly rate = 18% / 12 = 1.5%
2. Monthly interest = $1,000 * 0.015 = $15
3. Monthly principal payment = $50 - $15 = $35
4. New balance = $1,000 - $35 = $965
5. Continue this process until the balance is zero.
6. The total interest paid and the number of months required can be calculated from this process.