Paying off a credit card can seem like a daunting task. I wrote a calculator that will help you figure out how much time it will take to pay off a credit card, both by using a fixed payment or the minimum payment. You can find the calculator here.
Let’s say you have a credit card with a $2500 balance, and let’s assume the minimum payment is 4% of the balance. Let’s also assume the credit card has an interest rate of 12%.
The minimum payment the first month would be $100 and the next month it would be $97.
If you were to pay it off like this with a minimum payment of $10, it would take 8 years and 9 months to pay off the loan and it would cost $789.17 in interest.
If you were to pay $100 each and every month, it would take 2 years and 5 months to pay off the loan and it would cost $390.32 in interest. This is a savings of 6 years and 4 months and $398.85 in interest. And this is not paying anything more than you’re paying this month.
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Thanks for this very handy calculator!