Credit card payoff calculator and tips for tackling debt
Letting credit card debt build up—like dishes in the sink—can quickly turn something manageable into a mess. But if you fall behind, it’s still possible to pay off your debt.
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 your debt.
Key takeaways
- Using a credit card payoff calculator can help you understand how long it may take to pay off your debt.
- To use the credit card payoff calculator at the bottom of this article, you’ll need to know your current balance, interest rate or annual percentage rate (APR) and your card’s annual fee.
- With a timeframe in mind for paying off the debt, you can estimate the size of your monthly payments. Or you can estimate the timeline if you know what you can pay per month.
- The debt snowball and debt avalanche methods are two strategies the Consumer Financial Protection Bureau (CFPB) says can help reduce debt.
Key credit card terms to know when using a credit card payoff calculator
Before you use a credit card payoff calculator, there are some helpful terms to know:
- Credit card balance: Generally refers to the amount of money you owe on your credit card.
- 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, purchases may have a different APR from 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 that 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, involves identifying debts with the highest interest rate and paying those off first. 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 the other, larger debts while using the rest to knock out the smallest debt.
The debt avalanche and snowball methods aren’t the only credit card debt relief options. And they can also be applied if you’re trying to manage other debts. You could also consider how credit card debt consolidation might help you manage payments. For example, you may be able to simplify your payments and lower your interest rate by using a balance transfer.
If you’re having trouble keeping up with payments, consider reaching out to your credit card issuer to understand your options.
Paying off credit card debt FAQ
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.
The Capital One CreditWise Simulator can help you see how paying off credit card debt can affect your credit scores.
How long does it take to pay off $2,000 in credit card debt?
The length of time it takes to pay off any credit card debt depends on how much you can pay off a month, the credit card’s interest rate and whether the card has an annual fee. You can try it for yourself using the credit card payoff calculator below.
So say you have a $2,000 balance on a card with no annual fee and an APR of 20%. If you can pay $100 a month, it might take you 25 months to pay off the debt. If the card has the same APR but an annual fee of $100, it might take 29 months. And if you can pay $300 a month for a 20% APR card with a $100 annual fee, it might take you 8 months to pay off $2,000.
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 then enter your monthly credit card payment amount or the time frame in which you’d like to pay off the debt. You can use the calculator for any card you have—not just Capital One cards.
Once you have your results, you can explore ways to consolidate your credit card debt. A balance transfer credit card with a low introductory APR might be a good fit. You could even check to see if you’re pre-approved. It’s quick and only requires some basic info. And checking it won’t affect your credit scores.
Scroll down to start calculating your debt payoff plan.
