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A credit card can be a helpful financial tool if used responsibly. When you don't pay your credit card balance in full, the card issuer charges interest, which is the cost you pay for borrowing money and carrying a balance on your card.
Unfortunately, high credit card interest, while only making the minimum credit card payments, can put a lot of people deeper into debt.
Using our credit card payoff calculator below shows how much interest you may pay over time and how different amounts can help with paying off debt faster. Keep reading to learn more.
To use this, you'll need to have some important financial figures on hand. You'll need to know the total balance you owe, the annual percentage rate (APR) of your card, and the amount you plan to pay each month. You can find your credit card's APR and the total balance by looking at your recent credit card statement.
Our credit card APR calculator will then determine the estimated payoff date and estimate how much total interest you will pay. With this information, a credit card interest calculator can help you develop a debt payoff plan. Just remember that while our credit card calculator can serve as a guide, you must follow your debt payoff plan to be successful.
How is credit card interest calculated?
You may wonder how to calculate credit card interest. Your issuer will either calculate interest daily or monthly; this is outlined in your credit card terms, but many card issuers calculate interest daily.
For cards that use a daily balance, you'll need to divide your APR by 365 days. For example, an APR of 16.15% would have a daily percentage rate of 0.000442.
Next, you'll need to calculate your average daily balance. You can do this by checking to see how many days your billing cycle is and then figuring out the exact daily balance for all of those days. Add up the balance for each date of your billing cycle. Then, divide it by the number of days in your billing cycle to get the average daily balance.
For simplicity, let's say your billing cycle is 25 days, and your average daily balance is $2,920. To calculate your interest charges, multiply the average daily balance by the daily rate. Then divide that amount by the number of days in your billing cycle. For our example, $2,920 x 0.000442 = 1.29 x 25 = $32.25 in interest.
To quickly figure out how much interest you'll pay over time, use our credit card interest rate calculator (if you have many cards, a multiple credit card payoff calculator may be better).
How to pay off credit card debt
To pay off your credit card debt, you'll need to put more money toward your monthly credit card payments. Making just the minimum payment will only get you so far, resulting in more interest charges to your account. Look at your budget and try to free up some funds so you can pay more than the minimum payment amount each month. If you're unable to free up more funds, you may want to explore other options.
Some people who struggle with credit card debt decide to apply for a low interest credit card. Opening one of these cards makes it possible for you to transfer the balance from high interest cards. Many of these low interest cards have 0% interest intro offers for 15 to 18 months, giving you more time to pay off the debt without additional interest charges. Be aware that balance transfer fees are often charged -- typically 3% to 5% of the total balance transferred. For more information, check out our best intro 0% APR credit cards list for inspiration.
Consolidating your debt with a loan is another option. Look for a debt consolidation loan or personal loan with a lower interest rate than your credit card has. You can use the funds from the loan to pay off your card and then focus on repaying the loan. While the interest rates may be higher than what you can find with a low interest credit card, the nice thing about debt consolidation loans is they typically offer an extended repayment period of 24 to 60 months. This gives you even more time to pay off your debt. Be aware that loan origination fees may be charged, which are typically 1% to 8%.
If you have minimal credit card debt and can pay it off within 15 to 18 months, a balance transfer credit card or intro 0% APR credit card may be best. On the other hand, if you have more significant debt and need more time to pay it off, a personal loan or debt consolidation loan may make more sense.
You can first try asking your card issuer to lower your APR. If you've been a customer for a long time and haven't missed any payments, they may be more willing to reduce your interest rate.
2. Apply for a low interest credit card
If this doesn't work, you might consider applying for a low interest credit card. If you have a good credit score, you'll have better luck scoring one of these cards.
You can do a balance transfer once you have a card like this.This process allows you to transfer the balance from other high interest cards to a card with a lower interest rate. You can take your new interest rate and use our credit card payment calculator to determine how much interest you'll pay in full.
These three low interest credit cards are a good place to start your research. If they don't seem like a good fit, you can look through our full list of the Best Low Interest Credit Cards for more options.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
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We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 5.00 out of 5 stars.
5.00/5
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5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 5.00 out of 5 stars.
5.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.00 out of 5 stars.
4.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.00 out of 5 stars.
4.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Welcome Offer:
Discover will match all the cash back you’ve earned at the end of your first year.
Welcome Offer:
N/A
Welcome Offer:
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Long intro balance transfer APR
Rewards Program:
2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically
1% - 2% Cashback
Rewards Program:
N/A
Rewards Program:
N/A
Intro APR:
Purchases: 0%, 6 months
Balance Transfers: 0%, 18 months
Intro APR:
0% Intro APR for 18 billing cycles for purchases. 0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days. After the intro APR offer ends, 15.49% - 25.49% Variable APR on purchases and balance transfers will apply. A 3% fee applies to all balance transfers.
Purchases: 0% Intro APR for 18 billing cycles for purchases
Balance Transfers: 0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days
Intro APR:
Purchases: 0%, 12 months on Purchases
Balance Transfers: 0%, 21 months on Balance Transfers
Regular APR:
18.49% - 27.49% Variable APR *Rates as of December 12, 2024.
Regular APR:
15.49% - 25.49% (Variable)
Regular APR:
18.24% - 28.99% (Variable)
Annual Fee:
$0
Annual Fee:
$0
Annual Fee:
N/A
$0
Highlights:
INTRO OFFER: Unlimited Cashback Match for all new cardmembers–only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
Get a 0% intro APR for 18 months on balance transfers. Then 18.49% to 27.49% Standard Variable APR applies, based on credit worthiness. Rates as of December 12, 2024.
Redeem your rewards for cash at any time.
Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
No annual fee.
Terms and conditions apply.
Highlights:
0% Introductory APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 15.49% - 25.49% Variable APR will apply. A 3% fee applies to all balance transfers.
No annual fee.
No penalty APR. Paying late won't automatically raise your interest rate (APR). Other account pricing and terms apply.
Access your FICO® Score for free within Online Banking or your Mobile Banking app.
Contactless Cards - The security of a chip card, with the convenience of a tap.
This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Highlights:
No Late Fees, No Penalty Rate, and No Annual Fee... Ever
0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 18.24% - 28.99%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
BankAmericard® credit card is unavailable on Motley Fool Money. All information was collected independently and not reviewed for accuracy or provided by the credit card issuer. Some items may be out of date.
3. Negotiate the debt
If you're unable to lower your credit card interest rate, another option is to contact your credit card company and negotiate your debt. To pay off the debt, your card issuer may agree to let you make a lump-sum payment in full or work out a monthly payment plan. This option can hurt your credit, as your report will show the debt as settled, not paid in full. For this reason, you should consider this as a last resort.
Use this credit card calculator payoff with monthly payments to figure out the interest you'll owe, and use a debt payoff calculator to work out a repayment plan that allows you to pay off your debt faster. If you need more guidance, take a look at our personal finance resources.
FAQs
Most card issuers calculate interest daily. To use our interest rates calculator, you'll need to figure out your daily percentage rate. Next, you'll need to figure out your average daily balance. Finally, you'll take your average daily balance and multiply it by the daily interest rate and then multiply that number by the number of days in your billing cycle. Doing this will give you the total interest for that statement cycle.
You can pay off credit card debt by using your credit card amortization schedule to devise a debt payoff plan to put more of your income toward your monthly payments. It's worthwhile to speak with your credit card issuer to see if it will reduce your interest rate; some people have luck with this. Another option is to get a low interest credit card and transfer the balance of your debt to your new card. You can then work on your payoff plan while accumulating little to no interest, depending on the terms of your new card. If that doesn't work well, you might consider speaking with your card issuer to negotiate your debt.
You can lower your credit card interest rate in one of two ways. One is to calculate credit card interest, then ask your card issuer for a lower rate. In some cases, the card issuer will agree to do this. Another option is to apply for a low interest credit card or a card with an intro 0% APR offer so that you can transfer your credit card debt to your new card and tackle your debt faster.
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Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Discover Financial Services is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Bank of America, PayPal, and Target. The Motley Fool recommends Discover Financial Services and recommends the following options: long January 2027 $42.50 calls on PayPal and short December 2024 $70 calls on PayPal. The Motley Fool has a disclosure policy.
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