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Credit Card Payoff Calculator — Debt Payoff & Interest Calculator

Calculate payoff time and interest savings strategies

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Credit Card Payoff Calculator: Debt Elimination Strategy for 2026

The Credit Card Debt Crisis

Total US credit card debt reached $1.33 trillion by Q4 2025, with the average American household carrying $11,019 in credit card balances. The average interest rate on accounts assessed interest stands at 22.83%, meaning significant portions of monthly payments cover interest rather than principal reduction.

Current credit card debt statistics reveal the scale of the challenge:

| Metric | United States | United Kingdom | |--------|--------------|----------------| | Total National Debt | $1.33 trillion | £72 billion | | Average Household Debt | $11,019 | £2,572 | | Average Cardholder Balance | $7,886 | £2,471 | | Average Interest Rate | 22.83% | 22.8% | | Years to Pay (Minimum Only) | 25+ years | 26+ years |

Sources: LendingTree, WalletHub, NimbleFins UK

The mathematics are stark: a $7,886 balance at 22.83% APR, paying only minimum payments, requires over 25 years to repay and costs more than $12,000 in interest—exceeding the original debt.

Contents

Calculator Guide

The Current Balance field accepts the total amount owed on the credit card. This figure appears on monthly statements and includes any accumulated interest and fees.

The Annual Interest Rate (APR) is found on statements or by contacting the issuer. Current average rates range from 17.69% for excellent credit to 27.38% for poor credit. Many consumers underestimate their actual rate.

The calculator offers two payoff strategies:

Fixed Payment Strategy: Enter the monthly payment amount. The calculator determines time to payoff and total interest cost. This reveals how payment amounts affect repayment duration.

Target Time Strategy: Enter the desired payoff timeframe. The calculator determines the required monthly payment. This approach sets clear deadlines.

Results include:

  • Time to complete payoff
  • Required or chosen monthly payment
  • Total amount paid
  • Total interest cost
  • Comparison with minimum-payment-only scenario
  • Time and money saved

The Mathematics of Credit Card Interest

Credit card interest compounds daily but is typically assessed monthly. Understanding this mechanism reveals why minimum payments trap borrowers.

Monthly Interest Calculation:

Monthly Rate = APR ÷ 12
Monthly Interest = Balance × Monthly Rate

Example with Current Average Rate (22.83%):

Balance: $7,886 (current average) Monthly Rate: 22.83% ÷ 12 = 1.90% Monthly Interest: $7,886 × 0.019 = $149.83

Minimum Payment Structure:

Minimum payments are typically calculated as:

  • 2% of balance, or
  • $25 + monthly interest charge (whichever is greater)

On the $7,886 balance:

  • 2% of balance: $157.72
  • Interest charge: $149.83
  • Principal reduction: $157.72 - $149.83 = $7.89

After 12 months of minimum payments, the balance reduces by approximately $95—whilst $1,798 has been paid to the issuer.

The Minimum Payment Trap Visualised:

| Month | Balance | Payment | Interest | Principal | Progress | |-------|---------|---------|----------|-----------|----------| | 1 | $7,886 | $157.72 | $149.83 | $7.89 | 0.1% | | 12 | $7,791 | $155.82 | $147.91 | $7.91 | 1.2% | | 60 | $7,404 | $148.08 | $140.48 | $7.60 | 6.1% | | 120 | $6,848 | $136.96 | $129.91 | $7.05 | 13.2% |

After 10 years of payments totalling $17,540, the original $7,886 balance has decreased by merely $1,038.

2026 Interest Rates by Credit Score

Credit score significantly impacts interest rates, yet many consumers are unaware of their tier.

Current Average APRs (February 2026)

| Credit Score | FICO Range | Average APR | Monthly Interest on $5,000 | |--------------|------------|-------------|---------------------------| | Excellent | 740+ | 17.69% | $73.71 | | Good | 670-739 | 20.12% | $83.83 | | Fair | 580-669 | 24.50% | $102.08 | | Poor | Below 580 | 27.38% | $114.08 |

Source: Bankrate, CBS News

The Credit Score Impact on Payoff:

A $5,000 balance paid with $200 monthly:

| Credit Tier | APR | Months to Payoff | Total Interest | |-------------|-----|------------------|----------------| | Excellent | 17.69% | 31 months | $1,118 | | Good | 20.12% | 32 months | $1,295 | | Fair | 24.50% | 34 months | $1,643 | | Poor | 27.38% | 36 months | $1,908 |

The difference between excellent and poor credit costs $790 in additional interest on the same debt.

Rate Outlook for 2026

Bankrate forecasts credit card rates will remain elevated throughout 2026. The Federal Reserve opted not to cut rates at its January 2026 meeting, and similar decisions are expected through March. Cardholders should not anticipate meaningful rate relief in the near term.

Real Payoff Scenarios

Scenario 1: Average American Cardholder

Balance: $7,886 (current average) APR: 22.83% (current average)

Minimum Payments Only:

  • Initial payment: $157.72
  • Time to payoff: 27 years, 4 months
  • Total interest: $14,892
  • Total paid: $22,778

Fixed $300 Monthly Payment:

  • Time to payoff: 35 months
  • Total interest: $2,514
  • Total paid: $10,400
  • Interest saved: $12,378
  • Time saved: 24+ years

Target: Debt-Free in 24 Months:

  • Required payment: $407
  • Total interest: $1,882
  • Total paid: $9,768
  • Interest saved: $13,010

Scenario 2: UK Household Average

Balance: £2,572 (UK average) APR: 22.8% (UK average)

Minimum Payments Only:

  • Initial payment: £51.44
  • Time to payoff: 26 years, 10 months (per The Money Charity)
  • Total interest: £4,127
  • Total paid: £6,699

Fixed £100 Monthly Payment:

  • Time to payoff: 33 months
  • Total interest: £728
  • Total paid: £3,300
  • Interest saved: £3,399

Fixed £150 Monthly Payment:

  • Time to payoff: 20 months
  • Total interest: £428
  • Total paid: £3,000
  • Interest saved: £3,699

Scenario 3: Connecticut Resident (Highest State Average)

Balance: $9,778 (highest state average) APR: 22.83%

Minimum Payments Only:

  • Time to payoff: 29 years, 2 months
  • Total interest: $19,412
  • Total paid: $29,190

Fixed $400 Monthly Payment:

  • Time to payoff: 32 months
  • Total interest: $3,022
  • Total paid: $12,800
  • Interest saved: $16,390

Balance Transfer Strategy

Balance transfer cards offer 0% APR promotional periods, potentially saving thousands in interest. However, strategic execution is essential.

Top Balance Transfer Options (February 2026)

| Card | 0% APR Period | Transfer Fee | Regular APR | |------|---------------|--------------|-------------| | Wells Fargo Reflect® | 21 months | 5% | 17.49%-28.24% | | Citi Simplicity® | 21 months | 3% (first 4 months) | 17.49%-28.24% | | Chase Slate | 21 months | 3-5% | 18.24%-28.24% | | BankAmericard® | 18 months | 3% (first 60 days) | Variable | | Chase Freedom Unlimited® | 15 months | 3-5% | 18.24%-27.74% |

Source: U.S. News, Bankrate

Balance Transfer Calculation

Scenario: $7,886 balance at 22.83% APR transferred to Wells Fargo Reflect® (21 months at 0%)

Transfer Fee: $7,886 × 5% = $394.30

Total to Repay: $7,886 + $394.30 = $8,280.30

Required Monthly Payment: $8,280.30 ÷ 21 = $394.30

Original Path Comparison (keeping current card): 21 months of minimum payments: ~$3,115 paid, ~$7,600 still owed

Balance Transfer Savings:

  • Full payoff in 21 months: $8,280.30
  • Same period on original card: $3,115 paid + $7,600 owed = $10,715 total obligation
  • Net savings: $2,435

Critical Considerations

1. Credit Score Requirement: Balance transfer cards typically require good to excellent credit (670+ FICO). Those with poor credit may not qualify.

2. Payment Discipline: Missing payments often terminates the promotional rate immediately. The regular APR (17.49%-28.24%) applies to remaining balances.

3. Deferred Interest Warning: Some promotional offers charge retroactive interest if the balance is not paid in full by the promotional end date. Verify terms carefully.

4. New Purchases: New purchases may not receive the 0% rate and may accrue interest immediately. Avoid using the transfer card for new spending.

Regional Debt Comparison

Credit card debt varies substantially by geography, reflecting income disparities and cost of living differences.

US State Comparison

| State | Average Balance | Above/Below National | |-------|-----------------|---------------------| | Connecticut | $9,778 | +24% | | New Jersey | $9,748 | +24% | | Maryland | $9,630 | +22% | | National Average | $7,886 | — | | West Virginia | $5,336 | -32% | | Arkansas | $5,259 | -33% | | Mississippi | $4,887 | -38% |

Source: LendingTree

Debt by Age Group

| Age Group | Average Debt | Primary Factors | |-----------|--------------|-----------------| | Gen Z (18-27) | $3,262 | Lower credit limits, shorter history | | Millennials (28-43) | $6,521 | Housing costs, student loans | | Gen X (44-59) | $8,134 | Mortgages, children's education | | Baby Boomers (60-78) | $6,245 | Fixed income transition | | Silent Gen (79+) | $3,177 | Lower spending, downsized lifestyle |

Source: WalletHub

Gen X carries the highest average debt, squeezed between mortgage obligations and children's educational expenses.

UK Regional Perspective

UK household debt (excluding mortgages) has doubled over the past decade to £18,392 average. Credit card debt represents 15% of non-mortgage borrowing, with student loans (55%) and personal loans (31%) comprising the remainder.

The TUC projects unsecured debt will reach £17,179 per household by end of 2026 and exceed £19,000 by 2028—exceeding the pre-financial-crisis record of £16,800 set in 2007.

Debt Elimination Methods

Avalanche Method (Mathematically Optimal)

Order debts by interest rate, highest first. Pay minimums on all except the highest-rate debt; direct all additional funds to that balance. Upon payoff, proceed to the next highest rate.

Example:

  • Card A: $3,000 at 24%
  • Card B: $5,000 at 19%
  • Card C: $2,000 at 15%

Attack order: A → B → C

Advantage: Minimises total interest paid Disadvantage: Highest-rate debts may also be largest, delaying psychological wins

Snowball Method (Psychologically Effective)

Order debts by balance, smallest first. Pay minimums on all except the smallest balance; direct all additional funds to that balance. Upon payoff, proceed to the next smallest.

Example (same debts): Attack order: C → A → B

Advantage: Quick wins build momentum and motivation Disadvantage: Costs more in total interest

Hybrid Approach

If the highest-rate debt is also the smallest, both methods align. Otherwise, consider the rate differential:

  • Rate difference > 10%: Avalanche typically superior
  • Rate difference < 5%: Snowball motivation may justify small additional cost

Debt Consolidation Consideration

A personal loan at 10-12% APR can consolidate multiple credit cards at 20%+ APR, reducing interest cost. However:

  • Total cost depends on loan term (longer = more interest)
  • Fixed payment enforces discipline
  • Closing cards after consolidation may hurt credit score
  • Risk of accumulating new card debt whilst repaying loan

How This Calculator Works

Monthly Rate Calculation:

monthlyRate = (APR ÷ 100) ÷ 12

Minimum Payment Estimation:

minimum = max($25, max(0.02 × balance, monthlyRate × balance + 0.01 × balance))

Payoff Time (Fixed Payment):

if payment ≤ balance × monthlyRate:
    payoff impossible (payment does not cover interest)
else:
    months = -log(1 - (balance × monthlyRate ÷ payment)) ÷ log(1 + monthlyRate)

Total Payment:

totalPaid = payment × months (rounded up)

Total Interest:

totalInterest = totalPaid - originalBalance

Required Payment (Target Time):

payment = balance × [monthlyRate × (1 + monthlyRate)^months] ÷ [(1 + monthlyRate)^months - 1]

Minimum Payment Scenario: Simulates month-by-month with declining minimum payments, tracking cumulative time and interest.

All calculations execute locally within the browser.

Sources

FAQs

Why do minimum payments extend repayment for decades?

Minimum payments are structured to maximise issuer revenue. They typically cover monthly interest plus approximately 1% of principal. With current average rates exceeding 22%, most of each payment covers interest charges, leaving minimal principal reduction.

What constitutes a competitive credit card interest rate in 2026?

For excellent credit (740+ FICO), rates of 17-20% are competitive. Good credit (670-739) should expect 20-22%. Rates exceeding 25% indicate subprime pricing or opportunity to negotiate. The best rates offered by issuers currently average 20.15%, whilst the worst average 28.10%.

How much additional payment makes meaningful difference?

Even modest increases produce substantial impact. On a $5,000 balance at 22% APR, increasing payment from $100 to $150 monthly reduces payoff time from 9 years to 4 years and saves approximately $2,800 in interest.

Should balance transfer be pursued?

Balance transfers make sense when: (1) the balance can be repaid within the promotional period, (2) the 3-5% transfer fee is less than avoided interest, (3) credit score qualifies for good terms, and (4) discipline exists to avoid new purchases on the transferred card.

Is it preferable to pay smallest balance first or highest rate first?

Mathematically, highest rate first (avalanche method) minimises total interest. Psychologically, smallest balance first (snowball method) provides quick wins that maintain motivation. If rate differences exceed 10 percentage points, avalanche is typically superior. Otherwise, choose the method most likely to sustain commitment.

How does credit card debt affect credit score?

Credit utilisation (debt as percentage of credit limit) constitutes 30% of FICO score. Utilisation above 30% negatively impacts scores; above 50% damages scores significantly. Reducing balances below 30% of limits improves scores, potentially qualifying for better rates.

What options exist when minimum payments are unaffordable?

Options include: (1) negotiating lower APR with issuer, (2) balance transfer to lower rate, (3) debt management plan through nonprofit credit counseling, (4) debt consolidation loan, (5) as last resort, debt settlement or bankruptcy. Contact issuers before missing payments—hardship programmes may be available.

How do 0% APR promotional periods function?

During the promotional period (typically 12-21 months), no interest accrues on transferred balances. After expiration, the regular APR (often 17-28%) applies to remaining balances. Some offers impose retroactive interest if the balance is not cleared by promotional end date. Verify specific terms before transferring.

Why does credit card debt vary by US state?

Higher-debt states (Connecticut, New Jersey, Maryland) correlate with higher cost of living, higher incomes and higher credit limits. Lower-debt states (Mississippi, Arkansas, West Virginia) have lower costs of living, lower incomes and correspondingly lower credit limits. Regional economic factors substantially influence borrowing patterns.

What percentage of UK adults carry consumer debt?

Approximately 84% of UK adults held some form of credit or loan in the 12 months to May 2024. Excluding those who pay credit card balances in full monthly, 48% hold consumer credit. Those aged 35-54 are most likely to carry debt, with 60% of 35-44 year-olds holding consumer credit.