Why is credit card interest so costly compared to other debt?

Credit cards typically carry much higher APRs than loans or mortgages, and interest compounds monthly on the full remaining balance, so unpaid balances grow quickly.

Is paying only the minimum a good idea?

Minimum payments are usually a small percentage of the balance and are designed to extend repayment for years while maximizing interest paid. Paying more than the minimum, when possible, meaningfully shortens payoff time.

Credit Card Payoff Calculator

Calculate how many months it will take to pay off a credit card balance, and the total interest cost, based on your APR and a fixed monthly payment.

This payment does not cover the monthly interest charge, so the balance will keep growing. Increase your monthly payment and try again.

Total paid

Total interest paid

How this calculator works

Credit card interest typically compounds monthly. This calculator simulates the payoff month by month: interest accrues on the remaining balance at the card's monthly rate (APR / 12), then your payment is applied. The simulation runs until the balance hits zero or 600 months pass.

Formula reference: CFPB: How is credit card interest calculated?

Example

Example: a $4,500 balance at 24.99% APR with a fixed $200/month payment takes about 31 months to pay off and costs roughly $1,635 in total interest — more than a third of the original balance.

Frequently asked questions

Why is credit card interest so costly compared to other debt?: Credit cards typically carry much higher APRs than loans or mortgages, and interest compounds monthly on the full remaining balance, so unpaid balances grow quickly.
Is paying only the minimum a good idea?: Minimum payments are usually a small percentage of the balance and are designed to extend repayment for years while maximizing interest paid. Paying more than the minimum, when possible, meaningfully shortens payoff time.

This calculator provides estimates for general informational purposes only and does not constitute financial, tax, or legal advice. Always confirm important numbers with a qualified professional or your lender/institution before making a decision.