Credit Card Payoff Calculator
Calculate exactly how long to pay off your credit card debt and see how much you'll pay in interest. Use our credit card payoff calculator to compare debt snowball vs avalanche methods, plan payments for multiple cards, and discover strategies to become debt-free faster. With average credit card APRs exceeding 22%, every dollar paid above the minimum saves you money.
How Long to Pay Off Credit Card Debt?
The time to pay off a credit card depends on your balance, APR, and monthly payment. With the average credit card APR at 22.83% (2025), a $5,000 balance takes about 32 months with $200/month payments, but over 20 years paying only minimums.
- Payoff Formula: Balance ÷ (Payment - Monthly Interest) = Approximate months to payoff
- Key Factor: Paying even $50 extra per month can cut years off your payoff time and save hundreds in interest
- Best Strategy: Use debt avalanche (highest APR first) to minimize interest, or debt snowball (smallest balance first) for motivation
- Average APR: 21.39% for all accounts, 22.83% for accounts carrying a balance (Federal Reserve, Q3 2025)
💡 If You Paid Only Minimum Payments:
Debt Snowball
Smallest balance firstDebt Avalanche
Highest APR first--
❄️ Snowball Method
Pay smallest debts first for quick wins and motivation. May cost more in interest but keeps you motivated.
🏔️ Avalanche Method
Pay highest interest debts first to minimize total interest paid. Mathematically optimal but slower early wins.
📋 Recommended Payoff Order:
📊 Payment Breakdown
💡 Alternative Scenarios
📖 How to Use This Credit Card Payoff Calculator
Follow these simple steps to calculate your debt-free date and create a personalized payoff plan:
Find Your Credit Card Details
Locate your current balance, APR (interest rate), and minimum payment from your latest statement or online account. The average APR is about 22.83% for accounts carrying balances.
Enter Your Balance and APR
Input your total credit card balance and annual percentage rate. If you have multiple cards, use the "Multiple Cards" tab to enter all of them.
Set Your Monthly Payment
Enter how much you plan to pay each month. Tip: Paying more than the minimum dramatically reduces payoff time. Even an extra $50/month makes a big difference.
Review Your Results
See your payoff timeline, total interest, and debt-free date. Compare this to paying only minimums to see how much you'll save with higher payments.
Explore Different Strategies
Use the "Snowball vs Avalanche" tab to compare payoff methods, or set a goal debt-free date to see the required monthly payment. Adjust your inputs to find the best strategy for your budget.
💡 Pro Tip
Focus on one strategy and stick with it. Whether you choose the debt snowball for motivation or debt avalanche for savings, consistency is key. Consider setting up automatic payments to ensure you never miss a payment.
❓ People Also Ask About Credit Card Payoff
How long does it take to pay off $5,000 in credit card debt?
With a $5,000 balance at 22% APR: paying $200/month takes about 32 months with $1,397 in interest. Paying only minimum payments (2% of balance) takes over 20 years with $7,723 in interest. Increasing your payment to $300/month reduces payoff to just 20 months and only $835 in interest – saving you $562 and over a year of payments.
What is the smartest way to pay off credit card debt?
The smartest approach depends on your personality: Debt avalanche (highest APR first) saves the most money mathematically. Debt snowball (smallest balance first) provides quick wins for motivation. Other smart strategies include balance transfers to 0% APR cards, debt consolidation loans at lower rates, and increasing income specifically for debt payoff. The key is choosing a method you'll stick with consistently.
Is it better to pay off credit card in full or over time?
Always pay in full if possible. Paying in full each month avoids all interest charges, which average 22.83% APR. If you can't pay in full, pay as much as possible above the minimum. Carrying a balance doesn't help your credit score – that's a myth. Your credit utilization ratio (amount owed vs. credit limit) matters more, and lower is better.
How much credit card debt does the average American have?
According to the Federal Reserve and TransUnion data (Q3 2025), the average American household has $11,019 in credit card debt. Total U.S. credit card debt reached $1.233 trillion, with approximately 642 million credit card accounts. About 46% of cardholders carry a balance from month to month, paying an average of $514 in interest and fees annually.
Does paying off a credit card hurt your credit score?
Paying off credit cards typically helps your credit score by reducing your credit utilization ratio – one of the most important scoring factors. However, closing a card after paying it off can hurt your score by reducing available credit and shortening credit history. Keep paid-off cards open with occasional small purchases to maintain the benefits.
Should I pay off my credit card or save money?
Generally, pay off high-interest credit card debt first. With average APRs around 22%, you're losing more to interest than you'd earn saving. Exception: maintain a small emergency fund ($500-1,000) while paying debt to avoid adding new debt for emergencies. Once debt is paid, aggressively build savings. The math is clear: paying off 22% debt is like earning a guaranteed 22% return.
⚙️ How Credit Card Interest Works
Understanding how credit card interest is calculated is essential for developing an effective credit card payoff strategy. Unlike simple interest loans, credit cards use compound interest calculated daily, which can cause your debt to grow quickly if not managed properly.
The Average Daily Balance Method
Most credit card issuers use the Average Daily Balance (ADB) method to calculate interest charges. Here's how it works:
Credit Card Interest Calculation
For example, with a 22.83% APR: Daily Rate = 22.83% ÷ 365 = 0.0626% per day
Your average daily balance is calculated by adding up your balance for each day of the billing cycle and dividing by the number of days. This means new purchases increase your average balance immediately, while payments reduce it from the day they're received.
The Grace Period
Credit cards offer a grace period – typically 21-25 days after your statement closes – during which you can pay your full balance without incurring interest. However, this grace period only applies if you paid your previous month's balance in full. Once you carry a balance, the grace period disappears, and interest accrues immediately on new purchases.
🔑 Key Interest Facts
- Compounding: Interest compounds daily, meaning you pay interest on previously accrued interest
- No grace period on cash advances: Interest begins immediately on cash advances and balance transfers
- Different APRs: Purchase APR, cash advance APR, and penalty APR can all be different
- Variable rates: Most credit card APRs are variable and tied to the Prime Rate
Why Minimum Payments Are Dangerous
Credit card minimum payments are typically calculated as 1-3% of your balance or a fixed amount (usually $25-35), whichever is greater. According to the Consumer Financial Protection Bureau (CFPB), when you pay only the minimum:
- 70-90% of your payment goes to interest, not principal
- Your payment decreases as your balance decreases, extending payoff time
- A $5,000 balance at 22% APR takes 241 months (over 20 years) to pay off
- You'll pay $7,723 in interest – more than the original debt
⚠️ The Minimum Payment Trap
Card issuers set minimum payments low to maximize interest revenue. Your statement's "Minimum Payment Warning" box is required by law to show how long payoff takes with minimum payments only. This is a crucial wake-up call for anyone carrying a balance.
❄️🏔️ Debt Snowball vs Debt Avalanche: Which Strategy Is Best?
When tackling credit card debt, two strategies dominate the conversation: the debt snowball method and the debt avalanche method. Both are effective rollover payment strategies where you make minimum payments on all debts while focusing extra money on one target debt.
❄️ Debt Snowball Method
How it works: Pay off debts from smallest balance to largest, regardless of interest rate.
- ✅ Quick wins build motivation
- ✅ Psychological momentum
- ✅ Easier to stick with long-term
- ❌ May pay more total interest
- ❌ Takes longer mathematically
Best for: People who need motivation and quick wins to stay committed
🏔️ Debt Avalanche Method
How it works: Pay off debts from highest APR to lowest, regardless of balance size.
- ✅ Saves the most money
- ✅ Faster payoff mathematically
- ✅ Optimal for high-interest debt
- ❌ Slower initial progress
- ❌ Requires patience
Best for: Disciplined individuals focused on minimizing total cost
Research on Method Effectiveness
A study published in the Harvard Business Review found that people using the debt snowball method were more likely to completely eliminate their debts because of the emotional satisfaction from clearing smaller balances first. The National Bureau of Economic Research (NBER) confirmed that the psychological benefits of quick wins help people stick to their repayment plans.
However, the debt avalanche method is mathematically superior. If you have:
Example: Snowball vs Avalanche Comparison
Card A: $2,000 balance, 15% APR, $40 minimum
Card B: $5,000 balance, 22% APR, $100 minimum
Card C: $3,500 balance, 18% APR, $70 minimum
Extra payment available: $200/month beyond minimums
- Snowball order: A → C → B (by balance)
- Avalanche order: B → C → A (by APR)
- Avalanche saves: Approximately $250-400 in interest
- Avalanche faster by: 1-2 months
Which Method Should You Choose?
The best debt payoff method is the one you'll stick with. Consider:
- Choose Snowball if: You need motivation, have struggled with debt before, or have many small debts
- Choose Avalanche if: You're disciplined, have significant interest rate differences, or want to save maximum money
- Hybrid approach: If your highest-APR debt is also relatively small, both methods align – the best of both worlds
📊 Credit Card Interest Rates & Debt Statistics (2026)
Understanding current credit card interest rates and debt trends helps you benchmark your situation and make informed payoff decisions. Here's what the data shows for 2026:
Current Average Credit Card APRs
According to the Federal Reserve and industry sources:
| Category | Average APR | Source |
|---|---|---|
| All credit card accounts | 21.39% | Federal Reserve Q3 2025 |
| Accounts with balance (accruing interest) | 22.83% | Federal Reserve Q3 2025 |
| New credit card offers | 23.96% | LendingTree Dec 2025 |
| Store credit cards | 28-30% | WalletHub 2025 |
| Excellent credit (750+) | 17-19% | Experian 2025 |
| Poor credit (below 580) | 26-30% | Experian 2025 |
U.S. Credit Card Debt Statistics
The Federal Reserve Bank of New York and TransUnion report these key figures:
$1.233 Trillion
Total U.S. credit card debt (Q3 2025)
$11,019
Average household credit card debt
642 Million
Total credit card accounts in U.S.
3.05%
Credit card delinquency rate
Interest Rate Trends
Credit card rates have risen significantly since 2021 due to Federal Reserve rate hikes to combat inflation:
- November 2021: Average rate was 14.51%
- Q4 2024: Rates hit record highs near 21.76%
- Late 2024-2025: Fed rate cuts began, rates slowly declining
- December 2025: Average new card offers at 23.96% (lowest since April 2023)
💡 What This Means For You
With rates above 20%, every month you carry a balance costs significantly. A $10,000 balance at 22% APR accrues approximately $183 in interest per month. Prioritizing debt payoff or negotiating a lower rate with your issuer should be a top priority.
📚 Complete Guide to Paying Off Credit Card Debt
Eliminating credit card debt requires a strategic approach combining the right mindset, method, and money management. This comprehensive guide covers everything you need to become debt-free.
Step 1: Assess Your Total Debt Situation
Before creating a payoff plan, gather complete information on all your debts:
- List all credit cards with current balance, APR, minimum payment, and credit limit
- Note due dates to avoid late fees (typically $29-$40)
- Check for promotional rates that might expire soon
- Calculate total debt across all cards
Step 2: Review Your Budget
Use the 50/30/20 budget rule as a starting point:
- 50% for needs: Rent, utilities, groceries, minimum debt payments
- 30% for wants: Entertainment, dining, hobbies (reduce during debt payoff)
- 20% for savings/debt: Aggressively apply this toward credit card payoff
During debt payoff, consider temporarily shifting the "wants" allocation toward extra debt payments. Even reducing wants to 10-15% can significantly accelerate your debt-free date.
Step 3: Choose Your Payoff Strategy
Select from these proven approaches:
Debt Avalanche (Highest APR First)
Mathematically optimal. Focus extra payments on the highest interest rate card while making minimums on others. Saves the most money and time overall.
Debt Snowball (Smallest Balance First)
Psychologically powerful. Pay off smallest balances first for quick wins. Builds momentum and motivation to continue.
Balance Transfer
Transfer high-interest balances to a 0% intro APR card (typically 12-21 months). Pay off during promotional period. Watch for 3-5% transfer fees.
Debt Consolidation Loan
Combine all credit card debt into a single personal loan at a lower fixed rate. Simplifies payments and often reduces interest.
Step 4: Automate and Track Progress
Set up systems to ensure consistency:
- Automate minimum payments on all cards to avoid late fees
- Schedule extra payments right after each paycheck
- Track progress monthly – seeing balances decrease is motivating
- Celebrate milestones (each card paid off) without adding new debt
Step 5: Prevent Future Debt
After becoming debt-free, protect your progress:
- Build a 3-6 month emergency fund
- Pay credit cards in full each month
- Use cash or debit for discretionary spending
- Keep paid-off cards open for credit score benefits
- Review statements monthly for unauthorized charges
🚀 8 Proven Tips to Pay Off Credit Card Debt Faster
Accelerate your credit card payoff with these expert-backed strategies. Each tip can shave months or years off your debt-free date and save hundreds or thousands in interest.
Pay More Than the Minimum
This is the single most impactful change you can make. Even an extra $50/month on a $5,000 balance at 22% APR saves $1,800+ in interest and cuts payoff time by over 4 years. Double or triple your minimum payment whenever possible.
Make Bi-Weekly Payments
Instead of one monthly payment, make half-payments every two weeks. This results in 26 half-payments per year (equivalent to 13 monthly payments instead of 12), accelerating payoff and reducing average daily balance for interest calculations.
Negotiate a Lower Interest Rate
Call your card issuer and ask for a rate reduction, especially if you have a good payment history. According to LendingTree, about 76% of people who ask receive a lower rate. Even a 2-3% reduction saves significant money over time.
Use Balance Transfer Offers Strategically
Transfer high-interest balances to a 0% intro APR card and aggressively pay down during the promotional period (usually 12-21 months). Calculate whether the 3-5% transfer fee is worth the interest savings. Only do this once – don't chase offers repeatedly.
Apply Windfalls to Debt
Commit to putting unexpected money toward debt: tax refunds, work bonuses, birthday gifts, rebates, sold items. A $1,000 tax refund applied to credit card debt saves you $200+ in interest you would have paid.
Cut Expenses Temporarily
Identify 2-3 expenses to pause during debt payoff: subscription services, dining out, entertainment. Redirect this money to debt. Think of it as a "debt sprint" – temporary sacrifice for long-term freedom.
Increase Your Income
Even temporarily increasing income accelerates payoff dramatically. Options include: overtime, freelance work, selling unused items, part-time gigs. Dedicate 100% of extra income to debt – this is powerful because it's all "found money."
Stop Using Credit Cards
You can't fill a bathtub with the drain open. Switch to cash or debit for all spending while paying off debt. Some people physically freeze their cards in ice or keep them in a hard-to-access place to prevent impulsive use.
❌ 6 Common Credit Card Payoff Mistakes to Avoid
Many people unknowingly sabotage their debt payoff efforts with these common mistakes. Avoiding them can save you thousands of dollars and years of stress.
1. Paying Only the Minimum
This is the #1 mistake. Minimum payments are designed to maximize issuer profits. A $5,000 balance can take 20+ years to pay off and cost $7,000+ in interest with minimums only. Always pay more.
2. Continuing to Use Cards
Adding new charges while paying off debt is like running on a treadmill – you're working hard but not getting anywhere. Stop all credit card spending during payoff.
3. Closing Cards After Payoff
Closing paid-off cards reduces your available credit, increases utilization ratio, and shortens credit history – all hurting your credit score. Keep them open with occasional small purchases.
4. Ignoring High-Interest Debt
Some focus on low-balance cards for quick wins while ignoring high-APR cards bleeding them dry. If motivation isn't an issue, prioritize highest interest rates first (avalanche method).
5. Not Having an Emergency Fund
Putting every dollar toward debt without a small emergency fund ($500-1,000) backfires when unexpected expenses arise. Without savings, you'll add new debt – erasing progress.
6. Balance Transfer Misuse
Balance transfers can help, but many people: transfer without a payoff plan, make new purchases on the old card, don't pay off before the 0% period ends, or chase multiple transfers. Use strategically once.
✅ What To Do Instead
Create a written payoff plan with specific monthly payment amounts and target payoff dates. Track your progress monthly. Celebrate milestones without spending. Tell a trusted friend or family member about your goal – accountability helps.
🔢 Credit Card Payoff Formulas Explained
Understanding the math behind credit card interest helps you make better financial decisions. Here are the key formulas used in credit card payoff calculations.
Daily Periodic Rate (DPR)
Example: 22.83% APR ÷ 365 = 0.0626% daily rate
Monthly Interest Charge
Example: $5,000 × 0.000626 × 30 = $93.90 monthly interest
Months to Payoff (Fixed Payment)
Where Monthly Rate = APR ÷ 12. This formula assumes fixed payments above minimum.
Required Payment for Target Payoff
This calculates the fixed payment needed to pay off a balance in a specific number of months.
Understanding the Math
Let's break down why credit card debt grows so quickly:
Example: $5,000 Balance at 22% APR
- Monthly rate: 22% ÷ 12 = 1.833%
- First month interest: $5,000 × 1.833% = $91.67
- Minimum payment (2%): $5,000 × 2% = $100
- Principal paid: $100 - $91.67 = $8.33
- New balance: $5,000 - $8.33 = $4,991.67
At this rate, only 8.33% of your $100 payment reduces debt. The rest pays interest!
This is why our credit card payoff calculator is so valuable – it handles these complex calculations instantly and shows you the true cost of different payment strategies.
🔄 Credit Card Debt Payoff Alternatives
Beyond standard payoff strategies, several alternatives can accelerate your journey to becoming debt-free. Each has pros and cons depending on your situation.
1. Balance Transfer Credit Cards
How it works: Transfer existing balances to a card offering 0% intro APR (typically 12-21 months).
Pros
- 0% interest during promotional period
- All payments go to principal
- Can save hundreds or thousands
- Single payment simplifies management
Cons
- 3-5% balance transfer fee
- Requires good/excellent credit to qualify
- High APR kicks in after promo period
- Temptation to use old cards again
2. Personal Debt Consolidation Loan
How it works: Take a fixed-rate personal loan to pay off all credit cards, then repay the loan.
Pros
- Fixed rate (often 8-15% vs 22%+ on cards)
- Fixed monthly payment
- Definite payoff date
- Single payment simplicity
Cons
- Origination fees (1-8%)
- Requires decent credit
- Cards remain open – temptation risk
- Longer term may mean more total interest
3. Home Equity Loan or HELOC
How it works: Borrow against home equity at lower rates to pay off credit cards.
⚠️ Caution Required
While rates are lower (typically 7-10%), you're converting unsecured debt to secured debt. If you can't make payments, you risk losing your home. Only consider if you're disciplined and have stable income.
4. 401(k) Loan
How it works: Borrow from your retirement account to pay off high-interest debt.
- Pro: You pay interest to yourself, not a bank
- Con: Miss out on market gains while money is out
- Risk: Must repay quickly if you leave your job or face penalties
- Best for: Those with stable jobs and strong commitment to not adding new debt
5. Nonprofit Credit Counseling
How it works: A nonprofit credit counseling agency negotiates lower rates with creditors and creates a Debt Management Plan (DMP).
- Typically reduces APRs to 6-10%
- Single monthly payment to the agency
- Most cards closed during the program (3-5 years)
- Small monthly fee ($25-50)
- Look for agencies accredited by NFCC or FCAA
🧠 The Psychology of Credit Card Debt
Understanding the psychological factors behind credit card debt helps you break free from harmful patterns and maintain long-term financial health.
Why Credit Cards Lead to Overspending
Research from MIT and other institutions reveals that people spend 12-18% more when using credit cards versus cash. This "credit card premium" occurs because:
- Pain of paying is delayed: Cash activates the brain's pain centers; credit doesn't
- Abstract vs. concrete: Swiping a card feels less real than handing over bills
- Decoupled transactions: Purchase and payment are separated by weeks
- Future optimism bias: We assume future-us will handle the bill better
The Emotional Cycle of Debt
Many people experience a predictable emotional cycle with credit card debt:
- Excitement: Initial spending brings pleasure and satisfaction
- Denial: "I'll pay it off next month" or ignoring statements
- Anxiety: Realization that debt is growing faster than payments
- Shame: Hiding debt from partners/family, avoiding financial conversations
- Overwhelm: Feeling paralyzed, not knowing where to start
- Action: Finally creating a plan and taking steps
- Empowerment: Seeing progress and feeling in control
Breaking the Debt Cycle
Behavioral finance experts recommend these psychological strategies:
Make It Visible
Write down all debts and post where you'll see daily. Visibility creates accountability and reminds you of your goal constantly.
Use Visual Progress Trackers
Create a debt payoff thermometer or chart. Coloring in progress releases dopamine and maintains motivation.
Remove Friction
Make paying debt automatic and make spending harder. Remove saved card numbers, unsubscribe from retail emails, use cash for discretionary spending.
Find Your "Why"
Connect debt payoff to deeper values: security for family, freedom to travel, reduced stress. When motivation wanes, reconnect with your why.
💚 Self-Compassion Matters
Shame and guilt about debt often lead to avoidance, making things worse. Research shows self-compassion – treating yourself with the same kindness you'd show a friend – leads to better financial decisions. Acknowledge the past without dwelling on it, then focus on your plan forward.
👨💼 When to Seek Professional Help for Credit Card Debt
While most credit card debt can be managed independently, some situations benefit from professional assistance. Knowing when to get help can save you money and stress.
Signs You May Need Professional Help
- Debt-to-income ratio exceeds 40% (excluding mortgage)
- Using credit cards to pay basic living expenses
- Only able to make minimum payments
- Receiving collection calls or notices
- Considering bankruptcy
- Debt causing significant anxiety, depression, or relationship problems
- Multiple failed attempts to pay off debt independently
Types of Professional Help
Nonprofit Credit Counseling
Cost: Free or low-cost (often $0-50/month)
Services: Budget help, debt management plans, creditor negotiation
Look for: NFCC or FCAA accreditation
Financial Advisor/Planner
Cost: $100-300/hour or percentage of assets
Services: Comprehensive financial planning, debt strategy
Look for: CFP® (Certified Financial Planner) credential
Debt Settlement Companies
Cost: 15-25% of enrolled debt
Services: Negotiate reduced payoffs with creditors
Caution: Can damage credit, tax implications, many scams exist
Bankruptcy Attorney
Cost: $1,000-3,500+ depending on type
Services: Legal protection, debt discharge/restructuring
Consider: When debt is truly unmanageable and other options exhausted
⚠️ Avoid Debt Relief Scams
Be wary of companies that: charge upfront fees before providing services, guarantee to settle debt for pennies on the dollar, pressure you to stop paying creditors, or don't disclose risks. Check the Consumer Financial Protection Bureau (CFPB) and Better Business Bureau (BBB) before working with any debt relief company.
Free Resources
- NFCC.org: Find accredited nonprofit credit counselors
- ConsumerFinance.gov: CFPB resources on debt and credit
- AnnualCreditReport.com: Free credit reports from all three bureaus
- 211.org: Local financial assistance and counseling referrals
❓ Frequently Asked Questions
Get answers to the most common questions about credit card payoff calculators and debt repayment strategies.
Our calculator provides highly accurate estimates based on standard credit card interest calculation methods (average daily balance with compound interest). Results may vary slightly from your actual card due to: timing of payments within billing cycles, any fees or new charges, variable APR changes, and promotional rate expirations. For the most accurate projection, enter your exact current balance and APR from your most recent statement.
A good monthly payment is typically 2-3 times your minimum payment or 10-20% of your balance, whichever is higher. At minimum, try to pay enough so at least 50% goes to principal (not interest). For a $5,000 balance at 22% APR, aim for at least $200/month. The higher your payment, the faster you're free – and the less you pay in total interest.
Yes, paying off credit cards typically raises your credit score significantly by reducing your credit utilization ratio – one of the most important factors (30% of your FICO score). Experts recommend keeping utilization below 30%, and below 10% for the best scores. Paying in full each month shows responsible use. Don't close the accounts after payoff – the available credit helps your utilization ratio.
Build a small starter emergency fund ($500-1,000) first, then aggressively pay debt. This prevents new debt from unexpected expenses. Once credit cards are paid off, build a full 3-6 month emergency fund. The math favors paying off 22%+ APR debt over saving at 4-5% interest, but having no emergency cushion often leads to new debt – negating your payoff progress.
The formula is: Months = -log(1 - (Balance × Monthly Rate ÷ Payment)) ÷ log(1 + Monthly Rate), where Monthly Rate = APR ÷ 12. This is complex, which is why calculators exist! For a quick estimate: divide your balance by your monthly payment, then add 20-30% for interest. Our calculator does the precise math instantly.
Focus extra payments on one card at a time while making minimum payments on others. This is more effective than spreading extra payments across all cards. Choose your target based on: highest APR (avalanche method – saves most money) or lowest balance (snowball method – fastest wins for motivation). Both methods use the rollover principle – once one is paid off, apply its payment to the next.
Yes! According to surveys, about 76% of people who ask for a lower rate receive one. Call your issuer, mention your good payment history, and ask if they can lower your APR. If declined, ask again in 3-6 months after demonstrating consistent payments. Some people have success mentioning competitor offers or threatening to close the account.
Missing payments triggers: late fees ($29-40), penalty APR (up to 29.99%), negative credit report impact, and potential collection activity. If you can't pay, contact your issuer immediately – many have hardship programs with lower rates, waived fees, or modified payment plans. They'd rather work with you than have you default. Don't just ignore it – that makes everything worse.
The debt avalanche method (highest APR first) mathematically saves more money every time. Savings vary based on your specific debts but typically range from $100-500+ for moderate debt levels. However, the snowball method's psychological benefits help many people stay committed longer. The best method is the one you'll actually complete. Use our comparison tab to see exact savings for your situation.
Financial experts recommend allocating 20% of take-home pay to savings and debt repayment combined (the 50/30/20 rule). During aggressive debt payoff, you might temporarily increase this to 30-40% by reducing discretionary spending. Your total debt payments (all debts including cards, loans, etc.) should ideally stay below 36% of gross income – this is called your debt-to-income ratio.
This calculator uses industry-standard financial formulas based on the Average Daily Balance method used by most credit card issuers. Interest calculations follow Federal Reserve guidelines. Statistics sourced from the Federal Reserve, Consumer Financial Protection Bureau (CFPB), and major credit bureaus.
Last reviewed and updated: February 15, 2026
🔧 Related Finance Calculators
Explore more free calculators to help manage your finances: