Find out the true cost of carrying a credit card balance, when you'll pay it off, and how much you can save by paying more each month.
Credit card interest is one of the most expensive forms of debt — often 20–29% APR — yet most cardholders have no clear idea what they're actually paying. This calculator shows you the true cost of carrying a balance, exactly how long it'll take to pay off at your current payment, and how much you'd save by increasing what you pay each month.
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Credit card interest works differently from most loans — and that difference is expensive. Understanding how it's calculated helps you see why balances can feel impossible to escape, and why paying even a little more each month matters so much.
On a $3,000 balance at 24% APR, paying only the minimum (~$75/month) takes over 14 years to pay off — and costs more than $3,800 in interest alone. You'd pay more than twice the original balance before you're done.
APR stands for Annual Percentage Rate, but credit cards charge interest daily — your daily rate is your APR divided by 365. Interest compounds daily on most cards, meaning you're paying interest on your interest. That's why balances grow faster than expected and why carrying a balance from month to month is so costly.
Credit card minimum payments are typically set at 1–2% of your balance or $25–$35, whichever is greater. These minimums are deliberately low — they're structured to maximize the interest you pay over the life of the balance. Paying only the minimum is almost always the most expensive way to pay off a credit card.
The average credit card APR in the US has been above 20% in recent years. Rates below 15% are generally considered favorable; rates above 25% are high-cost. If you always pay your full statement balance every month, your APR is irrelevant — you'll never pay interest. APR only matters when you carry a balance.
Your credit utilization ratio — how much of your available credit you're using — is one of the biggest factors in your credit score. Keeping balances below 30% of your credit limit is generally recommended, with under 10% being optimal. Paying down balances improves your score, often within one billing cycle.
If your credit card charges 20%+ APR, paying it off is almost always the better financial move — you're unlikely to earn a guaranteed 20% return anywhere else. The only exception is maintaining a small emergency fund ($500–$1,000) so that unexpected expenses don't immediately put new charges back on the card.