Debt · Canada
Credit card payoff.
See exactly how long it takes to pay off your card and how much interest you'll save with extra payments. Compare minimum-only payments against your accelerated plan.
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Your payoff plan
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Understanding credit card payments
Credit cards typically charge interest on your outstanding balance if you don't pay the full amount by the due date. The Annual Percentage Rate (APR) is the yearly interest rate, but issuers calculate interest daily and charge it monthly.
Minimum payments
Credit card issuers set minimums as either a percentage of your balance (typically 2–3%) or a flat fee, whichever is greater. Paying only the minimum can take years to clear your balance and costs significantly more in interest.
Benefits of extra payments
Even an additional $50 or $100 per month can save thousands of dollars and years of payments. The calculator shows the comparison so you can see the impact.
Tips to pay off credit card debt faster
- Pay more than the minimum whenever possible.
- Consider a balance transfer to a lower-rate card.
- Stop using the card while paying it off.
- Set up automatic payments to avoid late fees.
- Use windfalls (tax refunds, bonuses) to make lump-sum payments.
TNAADO Inc. · Toronto
Why the minimum payment never ends
A credit card charges interest on the balance once the grace period is lost, and the minimum payment is typically a small percentage of the balance or a flat floor, whichever is greater. Because the minimum falls as the balance falls, it is shaped to keep the account open rather than to clear it. That is how a moderate balance at a typical card rate takes decades to repay and costs more in interest than the purchases originally did.
The mistake people make. Believing the grace period still applies. Interest-free days apply only when the statement is paid in full. Carry any balance and new purchases generally start accruing interest from the transaction date, so the grace period quietly disappears at exactly the moment it is needed. Anything paid above the minimum shortens the payoff sharply, which makes it the highest-return use of a spare dollar in most household budgets.
Disclaimer
This calculator provides estimates for educational and informational purposes only. Actual payoff times and interest charges will vary based on payment consistency, rate changes, additional charges, and fees. If you're struggling with credit card debt, consider consulting a non-profit credit counseling agency.