Credit Card Repayment Calculator

How to Use the Credit Card Repayment Calculator

This credit card repayment calculator shows how long it will take to clear your card, how much interest you'll pay along the way, and what you'd need to pay each month to be debt-free by a goal date. It also works as a credit card payoff calculator. It compares your plan with paying only the minimum, and it can compare a balance transfer to see whether moving the debt to a 0% offer would save you money.

How Credit Card Interest Is Calculated

Worked Example

Say you owe $5,000 on a card charging 20.99% p.a. and stop using it. The first month's interest is about $87.46. Repaying $200 a month clears the card in 34 months (2 years 10 months). You pay $1,632.05 in interest, or $6,632.05 in total, so the interest adds 32.6% to what you originally owed.

Paying only the minimum (2% of the balance or $25, whichever is higher) starts at about $101.75 and shrinks as the balance falls. After 50 years you'd have paid $24,678.98 in interest and still owe $86.24. Sticking to $200 a month saves at least $23,046.93 in interest and more than 47 years.

Want it gone in two years? Clearing the same $5,000 in 24 months takes $256.90 a month, with $1,165.69 in interest. A balance transfer at 0% for 12 months with a 2% fee ($100), still paying $200 a month, leaves $2,700 owing when the intro period ends. That remainder reverts to 21.99% and is paid off in 28 months. The total cost is $530.57 ($430.57 interest plus the fee), which is $1,101.48 less than staying on the original card.

Why Minimum Repayments Take So Long

Minimum repayments are designed to keep your account in good standing, not to clear the debt. At typical card rates, a 2% minimum covers the month's interest and only a little more, and it gets smaller as the balance falls. That's why Australian credit card statements must carry a minimum repayment warning. It sets out how long it would take, and how much you would pay in total, if you only ever paid the minimum, alongside the repayment needed to clear the balance over a shorter period. Paying even a little more than the minimum, as a fixed dollar amount that doesn't shrink, cuts the time dramatically.

Paying Off More Than One Card

Keep making at least the minimum on every card, then direct all spare money at one card at a time:

• Avalanche: pay down the highest interest rate first. It saves the most interest.
• Snowball: clear the smallest balance first. It costs a little more, but each card you close is a quick win that helps you keep going.

When one card is cleared, roll its repayment into the next. Run each card through this credit card calculator to see the payoff timeline.

Balance Transfers and Cash Advances

A balance transfer moves your debt to a new card with a low or 0% intro rate for a set number of months. To make it work, aim to clear the transferred balance within the intro period. Anything left over is charged the revert rate, which is often similar to or higher than a standard purchase rate. Budget for the transfer fee, which is often a percentage of the amount moved. Avoid new purchases on the new card, because they're commonly charged the full purchase rate from day one. Cash advances are usually the most expensive part of a card. They tend to carry a higher rate than purchases, get no interest-free days and often attract a fee each time.

Frequently Asked Questions

How does this credit card calculator work?

Enter your card balance and interest rate, then either a fixed monthly repayment (to see how long it takes to pay off) or the number of months you want to be debt-free in (to see the repayment you need). It works through your balance month by month, adding interest and taking off your repayment, and compares the result with paying only the minimum each month.

How do I calculate credit card interest?

Australian card issuers calculate interest daily: your balance each day × (annual rate ÷ 365), added up and charged to your account once a month. A quick monthly estimate is balance × annual rate ÷ 12, so a $5,000 balance at 20.99% p.a. costs about $87 in the first month. This interest calculator for credit cards uses that monthly estimate, so expect small differences from your statement.

Why do minimum repayments take so long to pay off a credit card?

The minimum is usually a small percentage of your balance (often 2%–3%) or a set dollar amount, whichever is higher. Because most of that minimum goes on interest, the balance falls very slowly, and as it falls the minimum shrinks too. Australian credit card statements must include a minimum repayment warning showing how long it would take to clear the balance, and how much you'd pay in total, if you only made minimum repayments.

How much do I need to pay to clear my credit card by a certain date?

Switch the calculator to “Pay off by a date” and enter the number of months. It works out the fixed monthly payment that clears the balance in exactly that time, using the standard loan repayment formula. Set up an automatic payment for that amount and stop using the card for new purchases, otherwise the payoff date will slip.

Is a credit card balance transfer worth it?

A balance transfer can save a lot of interest if you clear most or all of the balance during the low or 0% intro period. Watch for the one-off transfer fee, the revert rate that applies to anything left when the intro period ends, and the fact that new purchases on the new card are often charged the full purchase rate straight away. Turn on “Compare a balance transfer” in the calculator to see the interest plus fee and how much you'd still owe when the intro period ends.

Should I pay off the card with the highest rate or the smallest balance first?

With several cards, pay the minimum on all of them and put every extra dollar on one card at a time. The avalanche method targets the highest interest rate first and saves the most interest. The snowball method clears the smallest balance first, which costs a bit more but gives quick wins that help some people stick with it.

Are cash advances charged a different interest rate?

Usually, yes. Cash advances (ATM withdrawals, gambling and some money transfers on a credit card) generally have a higher rate than purchases, get no interest-free days, so interest starts from the day you withdraw, and often attract a cash advance fee as well. If part of your balance is cash advances, enter your card's cash advance rate or a blended rate for a more realistic estimate.

Why does my credit card payoff take longer than the calculator says?

The most common reasons are new purchases added to the card, annual or late fees, and daily interest in longer months. While you carry a balance you also usually lose your interest-free days on new purchases, so new spending starts costing interest straight away. Stopping new spending on the card you're paying down makes the biggest difference.

What if I can't afford my credit card repayments?

Contact your card issuer early, because they have hardship processes and may be able to arrange a temporary change to your repayments. You can also call the National Debt Helpline on 1800 007 007 for free, independent financial counselling. Be wary of paid “debt fix” services that charge large upfront fees.