Credit Card Interest Calculator
How long a card balance takes to clear and what it costs, with the effective annual rate spelled out. A 3.5% monthly rate is not 42% a year, it is over 51%.
Also called: credit card payoff calculator, card interest.
35 months at 5,000 a month, costing $74,988.98 in interest. The annual rate is 51.11%, not 3.5%, because it compounds monthly.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.
How this is calculated
Card rates are quoted monthly and compound monthly, so the annual rate is one plus the monthly rate raised to the twelfth, not twelve times it. At 3.5% a month that is the difference between 42% and 51.1%. The simulation then runs the balance down month by month, and separately checks whether the payment even covers the interest, because a payment below it means the balance never falls at all.
a monthly card rate compounds: the annual rate is not twelve times it- r_m
- Monthly rate (decimal)
Method and limits
What it assumes
- No new spending on the card, and interest charged on the full balance monthly.
What it deliberately does not model
- The interest-free period on new purchases is lost once a balance is revolved, which this assumes has already happened.
- Late fees, over-limit fees and any tax charged on the interest are not included. In India that is GST on the interest and the fees both.
Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator
Frequently asked questions
- Why is my annual rate higher than twelve times the monthly one?
- Because interest is charged on interest. Compounding twelve times turns 3.5% a month into 51.1% a year rather than 42%.
- What happens if I only pay the minimum?
- The balance falls extremely slowly and can take decades to clear, because the minimum is set close to the interest charge. This page warns when your payment barely covers it.