1. What is the Credit Card Debt Payoff Calculator?

This calculator determines how many months it will take to pay off your credit card debt based on your current balance, interest rate, and monthly payment amount.

2. How Does the Calculator Work?

The calculator uses the debt payoff formula:

Where:

• \( \text{Balance} \) — Current credit card balance (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( \text{PMT} \) — Monthly payment amount (USD)

Explanation: The formula calculates the time required to pay off debt when making fixed monthly payments, accounting for compound interest.

3. Importance of Debt Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, motivates debt reduction, and shows the impact of higher payments on interest savings.

4. Using the Calculator

Tips: Enter your current balance, annual interest rate, and planned monthly payment. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to exceed the monthly interest?
A: If your payment only covers interest (or less), your balance won't decrease and you'll never pay off the debt.

Q2: How can I pay off my debt faster?
A: Increase your monthly payment, reduce your interest rate (balance transfer), or make biweekly payments instead of monthly.

Q3: Does this account for minimum payments?
A: No, this calculates fixed payments. Minimum payments typically extend payoff time significantly.

Q4: What if I make additional payments?
A: Extra payments will reduce your payoff time. Recalculate with your new average monthly payment.

Q5: Does this work for other types of debt?
A: Yes, it works for any fixed-rate debt with compound interest (personal loans, etc.), but not for amortizing loans like mortgages.