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.
The minimum payment credit card payoff calculator on debtsteps.com is very easy to use and self-explanatory. You just need to come in prepared with all of your debt information in terms of what you have used on your credit card, what your interest rates are, and how much you have to pay at the bare minimum.
It’s perfect for a young person out of college like myself trying to get their future in order and their debt down. When I used the calculator, I was amazed at the ease of the application. I found it very straightforward to understand and after typing in my credit card information and hitting compute, I was smacked with eye-opening detail about how much debt I’d continue to be in if I only paid the bare minimum each month.
I found the summary given to be even better, because it really brings all of the information together and tells you the truth about how much is owed and what could be made by investing rather than wasting.
There’s really nothing confusing that I found with the calculator. If you’re prepared and have the information you need, you’re going to do just fine! I’ll recommend this to all my friends and family who I know are struggling with debt, and you should too.
Posted by: Ava
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.
Here is another calculator we offer: Our own Free Household Budget Calculator that lets you print out your results. It also provides results for special debt and income ratios that can help you track getting out of debt.