Credit card debt feels sticky because interest is charged every month on whatever you still owe. The good news: a modest increase in your monthly payment cuts both the time to be debt-free and the total interest, dramatically. Here's the math, with the free credit card payoff calculator to run your own numbers.
How card interest is charged
Your card's APR is an annual rate, but interest is applied monthly. The monthly rate is APR ÷ 12. Each month, that rate is charged on your balance, added to what you owe, and then your payment is subtracted. So on a $6,000 balance at 22% APR, the first month's interest is 6,000 × (22 ÷ 12 ÷ 100) ≈ $110.
The minimum-payment trap
Minimum payments are deliberately small — often around 1–3% of the balance. Because so little goes to principal, the balance barely moves and interest keeps piling on. If a payment is at or below the monthly interest, the balance never gets paid off. The calculator flags exactly this case and shows the payment you'd need to exceed to make progress.
Why paying more works
Every extra dollar above the interest goes straight to principal, which shrinks next month's interest — a compounding effect in your favour.
- $6,000 at 22% APR, paying $250/mo: about 32 months and ~$1,980 interest.
- Same balance, paying $400/mo: about 18 months and roughly half the interest.
A 60% larger payment cuts the payoff time nearly in half. Working to a deadline instead? Switch the calculator to Target timeframe mode and it tells you the exact monthly payment needed.
Avalanche vs snowball
With multiple cards, two popular strategies help:
- Avalanche: pay extra on the highest-APR card first. This minimises total interest — the mathematically cheapest route.
- Snowball: pay off the smallest balance first for a quick win and motivation, then roll that payment into the next card.
Either way, always pay at least the minimum on every card and put every spare dollar toward the target card.
FAQ
Why does my balance hardly drop? Because most of a minimum payment goes to interest. Paying more than the minimum sends the extra straight to principal, which speeds everything up.
Should I pay off debt or invest? A 22% card is guaranteed to cost 22% — hard to beat with investing. Clearing high-interest debt first is usually the better return.
Does a 0% balance transfer help? It can, by pausing interest so payments hit principal — but watch the transfer fee and the rate after the intro period ends.
Is my data private? Yes — the calculator runs entirely in your browser and stores nothing.