Find your ideal repayment plan with our credit card payoff calculator.
No one intentionally seeks to accumulate credit card debt. It is often a situation that arises without you even noticing, or may even seem beyond your control. Using a credit card debt calculator can help:
- Discover exactly how long it will take to break free from your balance
- Visualize the impact of increasing your monthly payments
- Compare different repayment strategies to find your fastest path to financial freedom
- Plan realistically by accounting for future purchases and annual fees
- 1 Enter your current credit card balance: Input the total amount you owe on your credit card
- 2 Input your card's interest rate: Enter the annual percentage rate (APR) of your credit card
- 3 Set your monthly payment: Enter the amount you plan to pay each month. You can adjust this to see how different payment amounts affect your payoff timeline
- 4 Review the results: The calculator will show you how long it will take to repay your debt, the total amount of interest you'll have to pay and the total amount you'll pay overall (payment and principal)
How to pay off credit card debt
If you're looking to eliminate your debt, it's important to understand that there is no one-size-fits-all solution for paying off credit card debt. However, there are several strategies that can assist you in improving your financial situation and regaining control.
While making minimum payments can help you avoid penalties and late fees, it's advisable to pay more than the minimum amount if at all possible.
If your goal is to rapidly pay off credit card debt, negotiating lower interest rates with your credit card issuers is an effective approach.
Debt consolidation can be a viable strategy, especially if you carry high-interest debt from multiple credit cards. By consolidating your debts, you'll only need to make a single monthly payment instead of managing multiple credit card balances and due dates.
Remember, finding the most suitable method for your circumstances is crucial, so consider your options carefully and seek professional advice if needed.
Comparing credit card payoff methods
Debt avalanche vs. debt snowball
Two of the most popular repayment options for making your monthly credit card payments are the debt avalanche and the debt snowball methods. They sound similar, but they work very differently:
Debt avalanche method
The debt avalanche method prioritizes the repayment of debt that carries the highest interest rate. By doing so, you minimize the overall amount of interest paid in the long run. However, the visible progress may be slower, particularly if your higher-interest-rate debt includes larger balances.
Debt snowball method
Using the debt snowball method, you begin by paying off your smallest debt balance while making minimum monthly payments on all other debts. Once the first debt is cleared, you allocate the money previously used for that payment towards the next smallest debt. By repeating this process, you’ll gradually build momentum, similar to a snowball rolling downhill.
Paying off smaller debts quickly provides an added sense of accomplishment. However, it's important to note that prioritizing debt balance over the APR may result in paying more in interest charges.
Credit card interest can be a complex topic, but it's crucial for cardholders to understand how these charges are calculated. Let's break down the process in simple terms, focusing on the most common method used by credit card companies: the Average Daily Balance (ADB) method.
Key Components:
- 1 Annual Percentage Rate (APR): This is the yearly interest rate on your credit card.
- 2 Daily Periodic Rate (DPR): This is your APR divided by 365 (days in a year).
- 3 Average Daily Balance (ADB): The average amount you owe each day during your billing cycle.
Calculating Your Interest Charges:
Step 1: Determine your Daily Periodic Rate (DPR)
- Simply divide your APR by 365
- For example, if your APR is 15%, your DPR would be 0.15 ÷ 365 = 0.00041
Step 2: Calculate your Average Daily Balance (ADB)
- Add up your balance for each day in the billing cycle
- Divide this total by the number of days in the cycle
Step 3: Compute your monthly interest charges
- Multiply your DPR by your ADB and the number of days in the billing cycle
Let's look at a practical example:
Let's say you have a credit card with a 15% APR. In one month, you had a $500 balance for the first 15 days, then you made a $100 payment, leaving a $400 balance for the remaining 15 days.
- Your DPR: 15% ÷ 365 = 0.00041
- Your ADB: (15 days × $500) + (15 days × $400) = $13,500$13,500 ÷ 30 days = $450
- Your monthly interest charge: 0.00041 × $450 × 30 days = $5.54
In this scenario, your interest charge for the month would be $5.54.
Tips for staying debt free in the future
- 1 Start building substantial savings: Building a significant savings account can be challenging, yet it’s crucial for financial stability. Consider your savings as a buffer for unforeseen expenses, providing a sense of preparedness.
-
2
Immediate payment of credit card transactions: Avoiding debt does not necessarily require using only cash. Some find it helpful to use physical currency to prevent impulsive purchases or accumulating a large credit card balance. If you understand your financial habits and know that managing a credit card will be challenging, it’s advisable not to get one.
-
3
Buy only what you need: While it may not appeal to impulse shoppers, there’s a simple yet effective strategy for saving money: think before you buy. Take the time to research the best deals and learn to listen to that inner voice that questions whether you truly need the item in question.
-
4
The power of budgeting: Creating a budget for your monthly expenses allows you to gain control over your finances and make informed decisions about your spending. By allocating specific amounts for savings and determining your available funds for necessities, you can effectively manage your money and achieve your financial goals.
-
5
Consolidate your credit cards: Having multiple credit cards can lead to multiple payments and accumulating interest. If you struggle to use your cards responsibly, it may eventually require debt consolidation. By limiting the number of cards you have, you can better track your spending and ensure timely payments, avoiding potential financial pitfalls.
What's next?
Now that you understand your current debt burden better, why not check out the top balance transfer credit cards in Canada? A balance transfer card can help you pay off that troubling debt and reduce your monthly payments significantly.

Amy Tokic is an SEO content editor for Money.ca. She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors. In her free time, Amy loves perusing used book and record stores, and chasing squirrels with wild abandon (a habit attributed to spending too much time with her pooches).
Disclaimer
The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.
†Terms and Conditions apply.