💳 Credit Card Calculator
How much is your credit card REALLY costing you?
Last updated: March 2026
* This calculator is for educational purposes only and does not constitute financial advice.
The credit card calculator reveals the true cost of revolving debt. When you pay only the minimum, interest works against you — you pay interest on interest, known as negative compounding. A $5,000 debt at 20% APR can cost you over $10,000 if you only make minimum payments.
The critical factor is the ratio between your monthly payment and new purchases. If you keep spending on your credit card while trying to pay off debt, the balance may never reach zero. This calculator simulates exactly that scenario and shows you when — or if — your debt will be paid off.
The most effective payoff strategy is the 'Avalanche' method — paying off the card with the highest interest rate first while maintaining minimum payments on the rest. A popular alternative is the 'Snowball' method — starting with the smallest balance for motivation. Either way, the key is to stop adding new debt.
Enter your current balance, the monthly payment you're willing to make, the annual interest rate (APR), and new monthly purchases — and the calculator will show you exactly how many months it takes and how much interest you'll pay.
📊 How does this compare to a S&P 500?
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FAQ
How does the credit card calculator work?
It calculates monthly interest on your balance, adds new purchases, and subtracts your payment each month until the debt is paid off or 360 months.
Why is credit card interest so expensive?
Because of negative compounding — you pay interest on interest. With a 20% APR, a $5,000 debt can cost you over $10,000 if you only pay the minimum.
How much should I pay each month?
The more you pay, the less interest you'll pay overall. Paying only the minimum can extend your debt for years and double the total cost.
What happens if I keep making new purchases?
New purchases increase your balance and significantly extend the payoff timeline. Stop new purchases to pay off debt faster.
What is the 'true cost' of credit card debt?
The true cost includes the original balance plus all interest paid until the debt is cleared. A $5,000 balance at 20% APR with minimum payments can cost over $12,000 total.
Should I take a personal loan to pay off credit card debt?
Often yes — a personal loan at a lower rate can save thousands in interest. Compare total costs before deciding.
What's the difference between APR and monthly rate?
APR (Annual Percentage Rate) is divided by 12 to get the monthly rate. In some countries, monthly rates are quoted which look low but compound to very high annual rates.
Is this better than an index fund?
Compare your results to investing in a S&P 500 at ~10% annually. Use this as a baseline to evaluate your investment decision.
How many months does your emergency fund cover? Find out with the Emergency Fund Calculator
📊 Data source: Standard financial models. Prices and data in this article are reviewed and updated semi-annually. Last update: March 2026.
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Created by Amiel Riss | SmartMoney77