Credit Card Payoff Calculator
How long to clear your card and interest paid.
Paying $300 a month, a $8,000 balance at 21.99% takes 3 years 1 month to clear, and costs $3,081 in interest.
Like Australian cards, interest is worked out daily at the yearly rate divided by 365, on the balance for each day of the statement month, and added once a month. The repayment then comes off. Each month uses its real number of days, starting from today, so the last repayment lands in a real month. It assumes no new purchases, fees or rate changes. If the repayment doesn't cover a month's interest, the balance never goes down.
How to use this credit card payoff calculator
Enter your current balance and the card's purchase interest rate (APR), which is on your statement. Then choose how you will repay:
- Fixed amount: you pay the same dollar amount every month until the card is cleared.
- Minimum only: you pay the minimum each month, set as a percentage of the balance with a dollar floor. Check your statement or card terms for your card's figures.
- The calculator works out interest the way most Australian cards do: daily, at the yearly rate divided by 365, charged once a month. Each month uses its real number of days from today, and the result shows the month of your last repayment and how much it will be. It assumes you make no new purchases and pay no fees.
- If your payment does not cover the month's interest, the balance never goes down and the result shows Never.
Minimum vs fixed repayments: what it costs
Take a $5,000 balance at 21.99% with no new spending. In the first month, interest is about $92. The first minimum repayment (2.5% of the balance) is about $127, so only around $36 goes towards the debt.
Because the minimum is a percentage of the balance, it falls as the balance falls. That keeps the debt around for decades. Keeping your repayment at the same dollar amount makes a big difference:
- Minimum only (2.5%, at least $25): 24 years 10 months. Interest $11,092. Total paid $16,092.
- Fixed $127 a month (the first minimum, never reduced): 5 years 11 months. Interest $3,940.
- Fixed $200 a month: 2 years 10 months. Interest $1,749.
- Fixed $260 a month: 2 years. Interest $1,221.
The minimum repayment warning on your statement
Australian credit card statements must include a minimum repayment warning. It shows how long it would take to pay off the balance if you only make minimum repayments, and how much interest that would cost. It also shows the monthly amount needed to clear the balance in a shorter time (most banks show 2 years), and what you would save.
Those estimates assume you stop using the card. Use this calculator to try other amounts, such as what you can afford to pay by direct debit each payday.
Card providers must also work out whether you could repay your whole credit limit within three years before approving a card or a limit. If a limit feels too high, you can ask for a lower one at any time.
How credit card interest works in Australia
Interest rates on credit cards vary widely, and the average is over 18%. Most cards work out interest daily on the balance and charge it once a month.
Many cards have an interest-free period on purchases. It usually starts on the first day of your statement period, not the day you buy something, and it only helps if you pay the full closing balance by the due date. If you carry a balance, you usually lose the interest-free days and pay interest on new purchases too. Check your card's terms.
Cash advances, such as ATM withdrawals on a credit card, usually attract a fee and interest from the day you take the cash out, with no interest-free period.
Ways to pay off credit card debt faster
The best step is to stop adding to the balance and pay a fixed amount you can afford every month.
- Automate it: set up a direct debit for a fixed amount so you never miss the due date or slip back to the minimum.
- More than one card? Put extra money on the card with the highest rate first to save the most interest, or on the smallest balance first if quick wins keep you going. Pay at least the minimum on the others.
- Balance transfer: a low or 0% rate for a set time can help, but there is usually a transfer fee, new purchases are often charged a higher rate, and whatever is left at the end reverts to a higher rate. Only worth it if you can clear the balance in time.
- Personal loan: a fixed-rate loan with a lower rate than your card forces a set payoff date. Compare the cost with the personal loan calculator, and close or cut the limit on the card so the balance does not build up again.
- Lower your limit: you can ask your provider to reduce your credit limit or cancel the card once it is paid off.
Frequently asked questions
It depends on your balance, rate and repayment. For example, $5,000 at 21.99% takes 2 years 10 months at $200 a month, but almost 25 years if you pay only a 2.5% minimum. Enter your own numbers above.
Most cards use a small percentage of the closing balance, often 2% to 3%, or a set dollar amount, whichever is higher. Your statement shows the exact figure; this calculator uses 2.5% with a $25 floor by default.
Use the fixed amount option and raise the payment until the time to clear shows 2 years. On a $5,000 balance at 21.99%, that is $260 a month, with $1,221 in interest.
Paying the minimum on time avoids late fees and a missed payment on your credit report. But it is the most expensive way to repay, because most of each payment goes on interest.
The balance never goes down. On $5,000 at 21.99%, the first month's interest is about $92, so a $90 repayment would never clear the card.
Usually not on purchases, if your card has an interest-free period and you pay the full closing balance by the due date. Cash advances usually attract interest from the day you withdraw the money.