About Credit Card Payoff Calculator
Find out how long it takes to pay off your credit card and how much interest you
How to use
- Enter your current total credit card balance from your most recent statement. If you have multiple cards, enter the combined total or run the calculator separately for each card to compare payoff strategies.
- Input your card's annual interest rate (APR), found on your monthly statement or card agreement. Most Canadian credit cards charge 19.99% for purchases and 22.99% for cash advances. Premium rewards cards often charge 20.99% to 22.99%.
- Enter your current monthly payment amount. If you only make minimum payments (typically 2-3% of the balance or $10, whichever is greater), enter the minimum to see how much that costs you in the long run.
- Set a higher target monthly payment to compare the difference. Even $50-$100 extra per month can save thousands in interest. The calculator shows exact savings in both time and dollars so you can find the sweet spot.
- Review your payoff timeline, total interest cost, and month-by-month payment schedule. On a $5,000 balance at 20%, your first $150 payment sends $83 to interest and only $67 to principal.
- Compare the snowball method (smallest balance first) versus the avalanche method (highest interest first) if you have multiple cards. The avalanche saves more money, but the snowball has higher success rates because quick wins maintain motivation.
- Use the results to set a concrete payoff date and automate your payments. Knowing exactly when you will be debt-free keeps you committed to the higher payment amount.
Frequently asked questions
How long will it take to pay off my credit card?
A $5,000 balance at 19.99% APR with only minimum payments (2% of balance) takes over 30 years to pay off and costs more than $7,700 in interest — you pay back more in interest than the original debt. Increasing to $150/month cuts the payoff to 4 years with about $2,100 in interest. At $300/month, you are debt-free in under 19 months with roughly $900 in interest. Enter your exact numbers above to see your specific payoff date and total cost.
Should I pay more than the minimum on my credit card?
Absolutely. Minimum payments are designed to maximize the lender's interest revenue. On a $3,000 balance at 19.99%, minimum payments of $60/month take 9 years to pay off and cost $3,400 in interest. Paying $150/month clears the same debt in 2 years with only $580 in interest — saving $2,820. Even adding $25/month above the minimum makes a significant difference.
What is the average credit card interest rate in Canada?
Standard Canadian credit cards charge 19.99% to 20.99% APR on purchases. Premium rewards cards range from 20.99% to 22.99%. Low-interest cards are available at 8.99% to 13.99% but usually have lower or no rewards. Cash advance rates are even higher at 21.99% to 24.99%, and interest on cash advances starts accruing immediately with no grace period. Store-branded credit cards can charge up to 29.99%.
Is it better to pay off the card with the highest interest rate first?
Mathematically, the avalanche method (highest interest rate first) saves the most money. On $10,000 split across cards at 24.99%, 19.99%, and 12.99%, the avalanche saves $400-$800 compared to the snowball method. However, the snowball method (smallest balance first) provides quicker psychological wins. Research by Harvard Business Review found that people using the snowball method were more likely to actually eliminate their debt. The best method is the one you will stick with consistently.
What is a balance transfer and should I use one?
A balance transfer moves existing credit card debt to a new card offering a lower promotional rate — often 0% for 6-12 months. This can save hundreds or thousands in interest if you aggressively pay down the balance during the promotional period. Watch for transfer fees (typically 1-3%) and note that remaining balance after the promo period reverts to the regular rate (often 20%+). You can also compare balance transfer savings against a lower-rate personal loan using our
Loan Calculator — sometimes consolidating into a fixed loan at 8-12% beats a 0% promo that ends and jumps to 22%. Balance transfers work best when you have a specific payoff plan and the discipline to avoid new charges.
How does credit card interest actually work?
Credit card interest is calculated daily using your Average Daily Balance. Your APR is divided by 365 to get the Daily Periodic Rate, then multiplied by your balance each day. At 19.99% APR, the daily rate is 0.0548%. On a $5,000 balance, that is $2.74 per day or roughly $83 per month in interest alone. Most cards offer a 21-25 day grace period on new purchases — pay your full statement balance by the due date and you pay zero interest. Once you carry any balance, the grace period typically disappears.
Should I use savings to pay off credit card debt?
In most cases, yes. If your savings earns 3-4% but your credit card charges 20%, every dollar in savings effectively costs you 16-17% per year. Pay off the high-interest debt first, keeping only a small emergency fund ($1,000-$2,000) to avoid going further into debt. The exception is if paying off the card would leave you with zero savings and a high likelihood of needing to charge emergencies right back onto the card. Once the debt is cleared, redirect the payment amount into rebuilding savings — use the
Savings Goal Calculator to plan how fast you can rebuild your emergency fund.
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