Minimum Payment Credit Card Calculator
Use free online calculators to calculate your way to financial control!
This minimum payment credit card calculator will show you how much
interest you will end up paying as well as the number of months/years
it will take to pay off your balance if you make only the minimum required
payment on your credit card bill.
According to the Federal Reserve Bank, more than 40% of American families spend more
money than they earn. When the paycheck runs out, additional expenditures are often
charged onto credit cards.
Unfortunately, unless you receive a pay raise or win the lottery, it is difficult to
pay these charges off, resulting in climbing balances with high interest rates. If you
find yourself in this position, you are not alone. In fact, more than 50% of cardholders
carry a balance from month to month and an Experian-Gallup Personal Credit Index Survey
shows that 11% of these people usually make only the minimum payment required.
Of course, it is always best to pay the balance in full each month, but often this isn't
possible. Even if you are unable to make the full payment, there are still ways to reduce
the amount of interest charges and pay your card off faster.
Tips For Using The Minimum Payment Credit Card Calculator
This minimum payment credit card calculator is a great tool to help you devise a plan
for paying off your credit card
debt. It will show you the amount of interest and the number of minimum payments you will
have to make before your balance is paid off (up to a maximum of 600 months).
However, you
can also play with the Minimum Payment Amount (D) to see how much time and money you will
save by paying a little bit more than what your credit card company requires, especially
since the average interest rate is 18%. You may be astonished to find out what your cards
are actually costing you and how much you can save by adding just a few dollars to your
payment each month.
For example, if you have a balance of $5000 at 18% interest, you first minimum payment will
likely be about $100 (minimum payments are typically 2-3% of the balance, depending on the
card). As you pay the balance down, the minimum payment will also go down, assuming that
you do not make any additional charges to the account. Therefore, if you continue to
make only the minimum pay, it will take you 46 years and 1 month to pay off the balance,
and you will also spend $13,931.11 in interest. Now, your $5000 in charges will cost you
a total of $18,931.11.
However, if you can afford the $100 first payment, why not keep paying this amount rather
than the declining minimum balance? Or, even an extra $25 if possible. Making a fixed monthly
payment of $125 will reduce the pay off time to 5 years and 2 months with interest charges of
$2693.85 for a total of $7693.11. Your balance will be paid off 40 years and 11 months sooner
and you will save $11,238.00 in interest. Now, that is motivation to come up with the extra
few dollars if possible, isn't it?
How to Use the Free Minimum Payment Credit Card Calculator:
Balance Amount on Credit Card: Enter the full balance owing on your current
credit card statement. Do not type in the dollar ($) sign. (ie. 5000.34)
Annual Interest Rate (APR): Your credit card bill should state the annual
interest rate you will pay on any charges. Enter this amount as a whole number
without the percent (%) sign. (ie. 18).
Minimum Payment Percent: Somewhere in your credit card disclosure statement,
the company will have included a phrase such as "Your minimum payment will be
2% of the balance or $10, whichever is higher." These are the figures that you
will enter into Item (C) and Item (D) respectively. It is necessary to fill in
only (C) OR (D). Again, for the Minimum Payment Percent, enter only whole numbers
without the percent (%) sign (ie. 2).
Minimum Payment Amount: Enter the minimum payment amount listed on your statement.
You can also enter various other amounts to see the difference paying a little more
can make. If you decide to work with payment amounts, you do not have to fill out the
"Minimum Payment Percent" column.
Once these entries have been completed, click the "compute" button to see your results.
Credit Card Minimum Payment Interest Calculator scripted and copyright © 1997-2004 Web Winder Site Traffic Magnets All rights reserved.
More Online Calculator Resources
Our own Free Household
Budget Calculator that lets you print out your results. It also
provides calculated results for special debt and income ratios.
Return to Free Online Budget Calculators for more free calculators.
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Payment Credit Card Calculator
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