Credit card payoff calculator and tips for tackling debt
September 21, 2023 4 min read
You can start by understanding how much you owe, how much interest you’re being charged and how much you can afford to pay each month. Once you have this information, using a credit card payoff calculator like the one below can give you a timeline for paying off debt.
- Using a credit card payoff calculator can help you understand how long it may take to pay off debt.
- The debt snowball and debt avalanche methods are two strategies the Consumer Financial Protection Bureau (CFPB) says can help reduce debt.
- It’s a good idea to reach out to your credit card issuer if you think you’ll have issues repaying debt. It may have ways to help.
Key credit card terms to know when using a credit card payoff calculator
Before you use a credit card payoff calculator and learn what it takes to become debt free, there are some helpful terms to know:
- Credit card balance: Generally refers to the amount of money you owe on your credit card.
- Annual percentage rate (APR): The yearly interest rate you’ll be charged on a credit card if you carry a balance. Credit cards can have various types of APRs. For example, there may be different APRs for new purchases and cash advances. And some cards may offer special introductory rates.
- Annual fee: The amount you’re charged per year for using a credit card. Not all credit cards have an annual fee.
- Minimum monthly payment: The lowest amount you can pay each month to help keep your account in good standing. Paying at least the minimum on time can help you avoid penalties and fees. Keep in mind, interest charges may apply if you only pay the minimum each month.
Strategies for paying off credit card debt
If you have multiple credit card accounts, there are two strategies the CFPB says might help you manage your debt:
- Debt avalanche method: This method—also known as the highest interest rate method—is when you identify your debts with the highest interest rate and pay those off first. But it’s still important to try to keep up with minimum payments for all debt.
- Debt snowball method: Using this method, you address your smallest debt first. In the meantime, you can make minimum payments on all other, larger debts while using leftover funds to knock out the smallest debt.
Alternate debt repayment options
The debt avalanche and snowball methods aren’t the only approaches to paying off debt. Here are some other options to consider:
- Contact your credit card company. Alert your credit card issuer as soon as possible if you’re unable to pay off your debt in full. It might be willing to find a repayment plan that works for both of you.
- Consolidate your debt. If you have multiple high-interest debts, you could consolidate them using a credit card balance transfer or a personal loan. These methods might help you get one simplified monthly payment and, in some cases, a lower interest rate—or even 0% APR for a limited time.
For more options, learn about other forms of credit card debt relief.
FAQ about paying off credit card debt
Here are some common questions about paying off credit card debt:
Will paying off your entire credit card balance in full every month hurt your credit scores?
Paying off your credit card balance in full every month could help your credit scores. That’s because your credit utilization ratio, which measures how much of your available credit you’re using, is a factor in calculating your credit scores. Experts recommend keeping your credit utilization ratio at or below 30%.
Is it better to pay off your credit cards in a lump sum?
The CFPB says it’s best to pay credit card balances in full each month. If you carry a balance, you may have to pay interest. Plus, a higher balance might increase your credit utilization ratio, which affects your credit scores.
What percentage of your credit card should you pay off?
The CFPB says it’s best to pay off the entire balance every month. But if you can’t do that, it’s a good idea to pay at least the minimum amount due on time every month. Experts recommend keeping your credit utilization ratio at or below 30% to avoid it negatively impacting credit scores.
Capital One’s CreditWise Simulator can help you see how paying off credit card debt can affect your credit scores.
How to use the credit card payoff calculator
To use the calculator below, enter your current balance, interest rate or APR and your annual fee, if you pay one. You can also enter your preferred monthly credit card payment amount or the time frame in which you’d like to pay off the debt. Once you have your results, if you realize you want to consolidate your credit card debt, you can explore ways to do that.
Scroll down to start calculating your debt payoff plan.