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Finance·1 min read·

Credit card payoff

Count the months and the interest to clear a card balance with a fixed monthly payment and an APR.

The answer

Each month adds interest of balance × APR ÷ 12, rounded to the cent, then subtracts the payment. The count stops when the balance reaches zero. A payment that does not cover the interest never finishes.

Result

11

Months to pay off

Interest
$91.62
Total paid
$1,091.62

This is not financial, tax, or legal advice.

What do you want to do next?

How this works

Monthly interest is the remaining balance times the APR divided by 12, rounded to the cent. The payment pays that interest first and the rest reduces the balance. The last payment is smaller if it would otherwise pass zero. $1,000 at 18% APR with a $100 payment takes 11 months and $91.62 of interest. You pay $1,091.62.

A new purchase, a fee, or a rate that changes next month is not in this loop. If the payment is less than or equal to the first month’s interest, the balance does not fall and the page stops.

Examples

  • $1,000 at 18% APR, paying $100 a month

    11 months. Interest is $91.62. Total paid is $1,091.62.

Common mistakes

  • ×

    Dividing the balance by the payment and ignoring the interest that accrues each month.

  • ×

    Using the yearly APR as the monthly rate.

Frequently asked questions

Why did the page refuse the payment?

The payment does not cover that month’s interest, so the balance would grow. Raise the payment above the interest.

Sources