Credit Card Payoff Calculator

Credit card payoff calculator

Amy Tokic

Fact checked by Cory Santos

Updated Mar 26, 2025

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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. 1 Enter your current credit card balance: Input the total amount you owe on your credit card
  2. 2 Input your card's interest rate: Enter the annual percentage rate (APR) of your credit card
  3. 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. 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)
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Credit card payment calculator

Use this calculator to see what it will take to pay off your credit card balance and what you can change to meet your repayment goals.

© Wise Publishing, Inc. | by: Money.ca ™

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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

Payoff approach
Best for
Time to pay off
Credit impact
Making minimum payments only
Emergency situations
Longest 
Minimum positive impact
Lump sum payment
Windfalls (tax refund, bonus)
Shortest
Major positive impact
Fixed monthly payment
Stable income
Medium
Moderate positive impact
Debt consolidation loan
Multiple debts
Medium (2 to 5 years)
Immediate small drop, positive impact after
Balance transfer
Good credit
Short (12 to 18 months)
Immediate small drop, positive impact after

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. 1 Annual Percentage Rate (APR): This is the yearly interest rate on your credit card.
  2. 2 Daily Periodic Rate (DPR): This is your APR divided by 365 (days in a year).
  3. 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. 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. 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. 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. 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. 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.

  • When should I seek debt relief?

    +

    If you’re struggling with your debt and finding it difficult to make progress on a repayment plan, it may be worth considering a debt relief program. These programs often involve seeking assistance from a non-profit debt management company that can help you develop a customized plan based on your specific circumstances.

  • Why should I have more than one credit card?

    +

    To achieve or maintain a favourable credit score, it is generally advisable to have two or three credit cards. This blend of credit can potentially enhance your credit mix, which is viewed positively by lenders and creditors. It’s advantageous to demonstrate a diverse range of credit types on your credit report.

  • What happens when I pay off a credit card balance?

    +

    The great thing about paying off your entire statement balance every month is that you can utilize credit cards without incurring any interest on the majority of accounts. This is made possible by the credit card grace period, which allows you to avoid paying interest when you pay your balance in full.

  • How do you calculate your credit card payoff date?

    +

    To determine your credit card due date, refer to your statement. Your specific payoff date will vary based on the amount you pay each month above the minimum. To select your desired payoff date, use our credit card payoff calculator and input the number of months you wish to take to pay off the debt.

  • When should I seek debt relief?

    +

    If you’re struggling with your debt and finding it difficult to make progress on a repayment plan, it may be worth considering a debt relief program. These programs often involve seeking assistance from a non-profit debt management company that can help you develop a customized plan based on your specific circumstances.

  • How does a credit card payoff calculator determine my payment timeline?

    +

    The calculator uses a mathematical formula that accounts for your current balance, interest rate (APR), and monthly payment amount to determine exactly how long it will take to pay off your debt. It calculates the compounding interest that accumulates daily or monthly (depending on your card agreement) and factors in how each payment reduces both principal and interest.

  • What happens if I make extra payments beyond the calculated monthly amount?

    +

    Extra payments can dramatically reduce your total interest paid and shorten your payoff timeline. Our calculator allows you to see the impact of additional payments by adjusting the "Current monthly payment" field. For example, on a $5,000 balance at 19% APR, increasing your payment from $150 to $200 per month would save you $471 in interest and help you become debt-free 9 months sooner.

  • Can the calculator account for variable interest rates?

    +

    While our calculator assumes a fixed interest rate, you can periodically update your information if your rate changes. If you anticipate a rate increase, consider using a slightly higher rate in your calculations to create a more conservative payoff plan.

Amy Tokic Associate Content Editor (SEO)

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).

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