How the payoff is worked out
Each month, interest is added to the balance and then your payment comes off. The calculator repeats that until the balance reaches zero. The last payment is usually smaller, because it only has to clear what is left.
Monthly interest = balance × APR ÷ 12 ÷ 100
New balance = balance + interest − payment
Payment to clear in n months = balance × r ÷ (1 − (1 + r)−n), with r = APR ÷ 12 ÷ 100
Card issuers actually charge a daily rate on the average daily balance; the CFPB explains that the daily periodic rate is the APR divided by 360 or 365. For a balance you are only paying down, the monthly method used here comes out within a few dollars over the life of the debt.
Worked example: $5,000 at 18%
Month one adds 5,000 × 0.18 ÷ 12 = $75.00 of interest. A $200 payment leaves $4,875.00. Interest shrinks a little every month as the balance falls, and the card is clear after 32 payments, the last one $113.97. Total interest: $1,313.97.
To be done in 36 months instead, the payment is $180.77. That is the same "36-month" figure the CFPB says your statement must show alongside the warning about how long minimum payments would take.
Several cards: avalanche or snowball
With several cards and one monthly budget, every card gets its minimum and the rest goes to a single target card. When that card is paid off, its money rolls onto the next target. The only difference between the two methods is the order.
| Card | Balance | APR | Minimum |
|---|---|---|---|
| Store card | $1,000 | 26% | $30 |
| Visa | $500 | 12% | $25 |
| Mastercard | $3,000 | 19% | $60 |
With $400 a month across these three cards, avalanche goes Store card, then Mastercard, then Visa: debt-free in 13 months with $479.79 of interest. Snowball goes Visa, Store card, Mastercard: also 13 months, but $515.85 of interest. Snowball cleared the first card in 2 months instead of 4, and cost $36.06 more for it.
- Avalanche always costs the same or less interest, because the most expensive debt goes first.
- Snowball gives a quick win. If that is what keeps you paying, the extra interest can be worth it.
- Ties are broken sensibly: avalanche picks the smaller balance when two APRs match; snowball picks the higher APR when two balances match.
All results assume no new purchases, no fees, and an APR that does not change. A promotional 0% rate that ends partway through will make the real payoff longer.
Questions people ask
How long does it take to pay off $5,000 at 18% paying $200 a month?
32 months. The first month adds $75.00 of interest (5,000 × 18% ÷ 12), so $125.00 of the payment reduces the balance. In total you pay $1,313.97 in interest. Halve the payment to $100 and it takes 94 months and $4,311.25 in interest.
What is the difference between the avalanche and snowball methods?
Both pay the minimum on every card and put every spare dollar on one target card. Avalanche targets the highest APR first, which always costs the least interest. Snowball targets the smallest balance first, so the first card disappears sooner, which some people find easier to stick with.
Why does my statement show a different payoff time?
Card issuers charge interest daily on the average daily balance, and minimum payments usually shrink as the balance falls. This calculator uses a fixed payment and charges balance × APR ÷ 12 each month, which lands within a few dollars for a card with no new purchases.
What payment pays my card off in 3 years?
Choose "Pay off in a set time" and enter 36 months. Your statement also shows this figure: card issuers must print the monthly amount that clears the current balance in 36 months. For $5,000 at 18% it is $180.77.
Do new purchases change the result?
Yes. The calculator assumes you stop using the card. Every new purchase adds to the balance and pushes the payoff date back, unless you pay it off in full each month on top of your planned payment.