myUSFinance

1. Enter your Current Balance ($) — This value represents your current balance
2. Enter your Annual Interest Rate (%) — This value represents your annual interest rate
3. Enter your Min Payment % of Balance — This value represents your min payment % of balance
4. Enter your or Fixed Min Payment ($) — This value represents your or fixed min payment
5. Click Calculate — Review your results in the output section below the form. The calculator instantly computes all values based on your inputs.
6. Adjust and Compare — Modify any input to see how changes affect the result. Try different scenarios to find the optimal approach for your situation.

All calculations are performed instantly in your browser. Your data is never sent to any server or stored anywhere — your financial information remains completely private.

Where:

• Balance — Current credit card balance
• Rate% — Minimum payment percentage (typically 1-3% of balance)
• Fixed Amount — Absolute minimum payment floor (typically $25-35)
• APR — Annual percentage rate used to calculate interest charges

Worked Example

Balance: $5,000 at 22% APR. Minimum payment: max($5,000 × 2%, $25) = $100. Monthly interest: $5,000 × (22%/12) = $91.67. Only $8.33 goes to principal! At minimums only: 28+ years to pay off, $7,700+ in total interest — more than the original balance.

Limitations and Assumptions

Credit card issuers set low minimum payments intentionally — it maximizes their interest revenue. The CARD Act of 2009 requires issuers to disclose on your statement how long payoff will take at minimum payments versus a fixed amount. Always pay more than the minimum. Even doubling the minimum payment can reduce payoff time from decades to years and save thousands in interest.

Understanding the following key concepts will help you interpret your results and make better financial decisions:

• Principal — The initial amount of money involved in the calculation, whether it is a starting balance, loan amount, or investment.
• Interest Rate — The percentage charged or earned on the principal amount, typically expressed as an annual rate (APR). This rate determines how quickly your money grows or how much borrowing costs.
• Compounding — The process of earning interest on previously earned interest. More frequent compounding (daily vs. monthly vs. annually) results in higher effective returns or costs.
• Time Horizon — The length of time over which the calculation applies. Longer time horizons amplify the effects of compounding and small differences in rates.
• Present Value vs. Future Value — Present value is what money is worth today; future value is what it will be worth at a specific point in the future, accounting for growth or inflation.

These concepts form the foundation of virtually all financial calculations. Understanding how they interact helps you evaluate any financial product or decision with confidence.

Let's compare debt repayment strategies with a real scenario.

Scenario: Jason has three debts and can allocate $800 per month total toward repayment:

• Credit Card A: $4,500 balance at 22.99% APR (minimum payment: $135)
• Credit Card B: $2,200 balance at 18.49% APR (minimum payment: $66)
• Personal Loan: $8,000 balance at 9.5% APR (minimum payment: $267)

Avalanche Method (highest rate first): Pay minimums on all debts, put extra $332 toward Credit Card A first. Debt-free in 26 months, total interest paid: $2,847.

Snowball Method (smallest balance first): Pay minimums on all debts, put extra $332 toward Credit Card B first. Debt-free in 27 months, total interest paid: $3,104.

The avalanche method saves Jason $257 in interest and one month. However, the snowball method eliminates his first debt in just 5 months, providing a motivational boost. Both methods are vastly superior to paying only minimums, which would take 94 months and cost $6,218 in interest.

1. Stop Accumulating New Debt

The first step in any debt payoff plan is to stop adding to your balances. Cut up credit cards or freeze them if necessary. No repayment strategy works if you continue borrowing.

2. Build a Small Emergency Fund First

Before aggressively paying down debt, save $1,000-2,000 for emergencies. Without this buffer, unexpected expenses will force you back into debt and undermine your progress.

3. Pay More Than the Minimum

Minimum payments are designed to maximize interest revenue for lenders, not to help you get out of debt. Even doubling your minimum payment can cut years off your repayment timeline.

4. Consider Balance Transfer Options

If you have good credit, a 0% APR balance transfer card can save significant interest during the promotional period (typically 12-21 months). Just be sure to pay off the balance before the promotional rate expires.

5. Celebrate Milestones

Debt repayment is a marathon. Set intermediate goals and celebrate when you hit them. Paying off your first card, reaching 50% of total debt paid, and making your final payment are all worthy of recognition.