Credit Card Calculator

This is a calculator for evaluating the length, interest, or monthly payment to pay off credit card balance. The balance, interest rate, and the minimum payment information can be found in the credit card statement.

Payback a Certain Amount

Credit Card Balance  
Interest Rate  
Minimum Payment or use Interest + 1% of Balance, 2%, 3%, 4%, 5%
How you plan to payoff?

       pay per month


Payback within Certain Timeframe

Credit Card Balance  
Interest Rate  
Payback in years

What is a Credit Card?

There is a basic difference between a Credit Card and a Debit Card. Your bank usually provides you with a debit card when you open a checking account. The card allows you to make payments that are deducted directly from your checking account. Usually, there is no fee associated with debit card payments.

A Credit Card is a form of unsecured loan, however, and must be applied for, and, often, paid for with an annual fee. Your bank, or credit card issuer, funds that piece of plastic with a certain amount of credit that you can use at your discretion. You can use up to a certain amount each month, called your limit, and if you spend more, you pay an over-the-limit fee. At the end of the month, you can either pay the entire amount back, or leave an unpaid balance on the card on which you will pay interest. Different cards offer varying rates of interest and the amount of credit you are offered usually depends on your credit rating.

If you already have a credit card, you may decide to apply for a new one, and to transfer the balance on your old card to the new provider – perhaps a better rate of interest is offered, or other incentives. Many card providers offer very low introductory rates of interest for balance transfers, but these usually only last for a short time.

Special Credit Cards

Many credit cards also offer related services. Some offer travel deals and bookings. Other offer cash-back on purchases, or special prices at favored merchants. Some credit cards made available to the very rich have special perks, like reservations at famous restaurants, entry to art openings, etc.

It is possible to build up a very large balance of credit on a card by making payments on time for many years. Credit card providers will then offer more and more credit each year. But consumers must be careful about using the credit on these cards, because the rate of interest can be very high, and servicing the debt can become very expensive. Cards like these very often offer a substantial reward for regular use.

There are also specialized credit cards. Some retails stores issue cards that are valid only at that particular store. Some cards are issued only for specialized uses, to pay business expenses, or to be used when travelling.

There are also special cards for those whose credit rating is too poor to enable them to obtain a normal card. With these cards, the consumer must put up a fixed amount of money which is then placed on the card. The consumer can then use that sum with the card.

Interest on Credit Cards

Unless one is benefiting from a special offer, the interest one pays on a credit card balance is usually quite high. Card providers refer to the interest rate as the annual percentage rate or APR. Some cards have variable APRs, based on specific indexes. Others have fixed APRs with a fixed rate.

Credit card interest charges are calculated on a monthly basis. Since months vary in length, most credit card issuers use a Daily Periodic Rate to calculate interest charges. The Daily Periodic Rate is calculated by dividing the APR by 365. That number is then multiplied by the average daily account balance and by the number of days in the statement billing cycle. Here's the basic formula:

You should multiply the balance by the Daily Periodic Rate by the number of days in the statement billing cycle to determine the interest for that month's statement. Our credit card calculator can help.

APRs average at about 20 percent, a very high rate of interest today. The calculation of your monthly payment will lead your provider to charge you a minimum payment, which is almost entirely an interest payment. You must make this payment if you are to keep your credit working. Failure to make the minimum payment will lead to a cancellation of your card, legal proceedings, and a serious loss of credit.

Managing Credit Card Cost

Credit cards offer a great way to manage your money, but you have to use them carefully. You should be aware of the interest rate on your balance, and, if you increase your balance, be careful about what you will have to pay in the coming months to bring it down.

Always pay more than the minimum payment. Even a few more dollars than the minimum will help to reduce your balance. The minimum is just interest.

It is always possible to withdraw your credit in the form of cash, but you should be very careful about doing this. Cash withdrawals from credit cards are usually burdened with a much higher APR. You will pay much more for your cash than if you use the card to pay for a good or a service.

If you find that your card leads you into temptation, don't be afraid to leave it at home. Running up a too-large credit card bill can lead to terrible financial insecurity. It is easy to do, a little at a time, and suddenly one is confronted with payments that a just too large to make each month. If you feel that you're being drawn in this direction, put the card somewhere you won't find it easily.

If you've already been too far along this path, there are steps that you can take. A credit card counsellor can work with you to arrange debt consolidation. There are ways for a professional to help you put your debt together so that you pay a lower interest rate and a make a manageable monthly payment. Don't keep struggling: Seek help, and consult a debt consolidation counsellor.

The Credit Card Calculator enables you to determine your payments, your interest rate, and your projected balance. The Amortization schedule shows you just how long it will take to pay that balance down.