Affiliate disclosure: This page contains affiliate links. We may earn a commission if you click through and take action, at no extra cost to you. Learn more.
Credit Card Payoff Calculator
Enter your balance, APR, and monthly payment to see exactly what your credit card debt is costing you, and how long it will take to pay off. You'll get a Worth It Score from 0–100 based on your current payoff trajectory.
Average US credit card APR: ~22%
Sources & Methodology
- Federal Reserve G.19 Consumer Credit Release, monthly average APR on credit card accounts at all reporting commercial banks
- CFPB Consumer Credit Trends, credit card origination, balance, and delinquency data
- Interest Rate on Credit Card Plans (FRED / Federal Reserve), historical APR series for all credit card accounts
By Sean Baldwin · Last reviewed July 2026
Frequently Asked Questions
How is credit card interest calculated?
Credit card interest is calculated using your daily periodic rate (APR divided by 365) applied to your average daily balance. This is why carrying a balance from month to month is so expensive, interest compounds daily.
Should I pay the minimum payment on my credit card?
No. Minimum payments are designed to keep you in debt as long as possible. On a $5,000 balance at 22% APR, paying only the minimum (~$100/month) could take over 8 years and cost $4,000+ in interest. Always pay as much above the minimum as possible.
What is the avalanche vs snowball method for paying off debt?
The avalanche method pays off the highest-interest debt first, this saves the most money. The snowball method pays off the smallest balance first, this provides psychological wins. Mathematically, avalanche wins every time, but snowball works better if you need motivation.
Does paying off credit cards improve my credit score?
Yes, significantly. Your credit utilization ratio (balance vs limit) makes up 30% of your FICO score. Paying down balances below 30% of your limit can boost your score by 50+ points. Paying off entirely is even better.
Should I use a balance transfer to pay off credit card debt?
Often yes, balance transfer cards with 0% intro APR (usually 12-21 months) can save significant money. The key is: you must pay off the full balance before the promo period ends, and watch for transfer fees (typically 3-5%).
Example: $5,000 Balance at 22% APR
Paying $200/month instead of the minimum (~$100) cuts payoff time by over 5 years and saves more than $3,000 in interest. A score above 70 means your current payment trajectory is aggressive enough to get out of debt efficiently, the math clearly supports staying on this plan.
How credit card interest actually works
Credit card interest is calculated daily, not monthly. Your APR is divided by 365 to get a daily rate, which is then applied to your average daily balance. On a $5,000 balance at 22% APR, you're paying roughly $3.01 in interest every single day, before you've spent another dollar. That's $110 per month in interest alone, which is why minimum payments barely move the needle. Most minimum payments are set at 1–2% of your balance, designed specifically to keep you paying for as long as possible while maximizing the card issuer's profit.
The avalanche vs. snowball method, which saves more money
The debt avalanche method targets your highest-interest balance first, then rolls that payment into the next-highest, and so on. Mathematically, this always saves the most money. The debt snowball method targets your smallest balance first regardless of interest rate, giving you faster psychological wins. Studies show the snowball method leads to higher completion rates for people who struggle with motivation, so the "best" method is the one you'll actually stick to. If you have only one credit card, neither label applies: just pay as much as you can above the minimum every month.
What a balance transfer can and cannot do
A balance transfer moves your existing debt to a new card with a 0% intro APR, typically for 12 to 21 months. During that window, every dollar you pay reduces principal rather than servicing interest. On a $5,000 balance, a 15-month 0% offer lets you pay it off with $333/month, compared to over 8 years and $4,000+ in interest at 22% APR paying minimums. The catch: balance transfer fees run 3–5% (a $5,000 transfer costs $150–$250 upfront), and if you carry any balance past the promo period, the revert rate is often 25%+. Only do a balance transfer if you have a clear plan to pay it off before the promotional rate expires.
How much your credit utilization affects your score
Credit utilization, the ratio of your balance to your credit limit, makes up about 30% of your FICO score. Using more than 30% of any card's limit starts to hurt your score; using more than 50% causes significant damage. Paying a $4,500 balance down to $1,500 on a $5,000 limit card (from 90% to 30% utilization) can increase your score by 50–100 points almost immediately, since utilization is recalculated every billing cycle. This matters because a higher credit score translates directly into lower interest rates on mortgages, auto loans, and future credit cards.
Related Calculators
How We Calculate Your Score
The Worth It Score is based on the ratio of total interest paid to your original balance, and how long the payoff takes. Paying a small fraction of your balance in interest with a short timeline scores near 90; paying more in interest than you borrowed with a 5+ year timeline scores near 8.
- · Interest-to-principal ratio: under 10% → 90; under 25% → 75; under 50% → 55; under 100% → 35; under 200% → 20; 200%+ → 8
- · Payoff timeline: 12 months or less adds 10 points; over 60 months subtracts 15 points
A high score here means your current payoff plan is efficient. A low score is a signal to increase monthly payments or explore a balance transfer or debt consolidation loan to reduce the total interest cost.
Cite this calculator: Worth It Calculators, "How Much Is Your Credit Card Debt Really Costing You? (2026)," worthitcalculators.com/credit-card-payoff/ (updated July 2026).