See how long it takes to pay off your credit card balance and how much interest you'll pay. Compare minimum payments vs. fixed payments to see the real cost of debt.
Based on fixed APR with no additional charges. Actual payoff time may vary based on new purchases, APR changes, and fees.
Credit card companies set minimum payments low — typically 1–3% of your balance or a fixed floor like $25. This keeps you paying for years or even decades. On a $5,000 balance at 22.99% APR, making only the minimum payment takes over 20 years and costs thousands in interest — often more than the original balance.
Even small increases above the minimum dramatically reduce your payoff time. Paying $250 instead of $100 per month on that same balance cuts your payoff time from years to about 2 years and saves thousands in interest.
Avalanche method: Pay minimums on all cards, put extra money toward the card with the highest APR. This minimizes total interest paid — mathematically optimal.
Snowball method: Pay minimums on all cards, put extra money toward the smallest balance. You'll pay slightly more interest overall, but the psychological momentum of eliminating a card completely keeps people motivated. Studies show the snowball method actually has higher completion rates.
Balance transfer: Move your balance to a 0% intro APR card (typically 12–18 months). This eliminates interest temporarily, letting 100% of your payment go to principal. Watch out for transfer fees (usually 3–5%) and the regular APR that kicks in when the intro period ends.
Credit card interest is calculated daily on your average daily balance. Your APR is divided by 365 to get the daily rate, which is then applied to your balance each day. This daily compounding is why credit card debt grows faster than simple annual interest would suggest.
Always, if possible. Minimum payments are designed to maximize the interest the issuer collects. Even an extra $50 per month can save you years of payments and thousands in interest. Use this calculator to see the exact impact of different payment amounts.
If your credit card APR is higher than what you'd earn from savings or investments (and it almost always is — 20%+ APR vs. 5% savings), paying off the card first gives you a guaranteed higher "return." The exception: maintain a small emergency fund first so you don't go back into debt for unexpected expenses.
No. Paying off credit cards improves your credit score by reducing your credit utilization ratio (the percentage of your credit limit you're using). Utilization accounts for about 30% of your FICO score. Keeping it below 10% is ideal.