Find out how long it takes to pay off your credit card, how much interest you'll pay in total, and how much you can save by paying more each month.
| # | Payment | Interest | Principal | Balance |
|---|
Credit card interest is calculated using your Annual Percentage Rate (APR), divided into a daily periodic rate. Each month, interest is charged on your remaining balance. Because interest accrues on the balance before your payment is applied, making only the minimum payment barely reduces your principal — most of your payment goes straight to interest.
| Balance | APR | Min Payment | Payoff Time | Total Interest |
|---|---|---|---|---|
| $1,000 | 20% | 2% of balance | ~8 years | ~$900 |
| $3,000 | 22% | 2% of balance | ~15 years | ~$3,500 |
| $5,000 | 24% | 2% of balance | ~22 years | ~$7,200 |
| $10,000 | 20% | $200 fixed | ~8 years | ~$9,400 |
Pay the minimum on all cards except the one with the highest APR. Put all extra money toward the highest-rate card first. Once that's paid off, roll that payment to the next highest rate. This minimizes total interest paid.
Pay the minimum on all cards except the one with the smallest balance. Put all extra money toward the smallest balance first. Once paid off, roll that payment to the next smallest. This builds psychological momentum with quick wins.
Move high-interest debt to a card with a 0% introductory APR (typically 12–21 months). Pay off as much as possible during the 0% period. Watch for balance transfer fees (usually 3–5% of the transferred amount).
Credit card interest is calculated using the Daily Periodic Rate (DPR = APR ÷ 365). Your average daily balance is multiplied by the DPR, then by the number of days in the billing cycle. For example, a $5,000 balance at 20% APR: DPR = 0.0548%, monthly interest ≈ $83.
The average credit card APR in the US is around 20–25% as of 2025. Anything below 15% is considered low; above 25% is high. If you pay your balance in full each month, APR doesn't matter — you pay no interest. If you carry a balance, a lower APR saves significant money.
If your credit card APR (20%+) is higher than your savings rate (4–5%), paying off the debt first gives you a better guaranteed return. However, keeping a small emergency fund ($500–$1,000) before aggressively paying debt prevents you from having to put unexpected expenses back on the card.
Yes — paying bi-weekly instead of monthly reduces your average daily balance, which reduces the interest accrued each cycle. It's a small but real saving, especially on high balances. Some people also find it easier to budget with smaller, more frequent payments.
Credit card minimum payments are typically 1–3% of your balance or $25 (whichever is greater). Since most of each payment goes to interest, your principal barely decreases. A $5,000 balance at 20% APR with a 2% minimum payment can take over 20 years to pay off and cost more in interest than the original debt.