1. What is the Bankrate Payoff Calculator?

The Bankrate Credit Card Payoff Calculator helps determine how long it will take to pay off a credit card balance based on your current balance, monthly payment, and interest rate. It uses the standard loan payoff formula to calculate the exact number of months required.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( PMT \) — Monthly payment amount (USD)
• \( Balance \) — Current credit card balance (USD)
• \( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates the exact number of months needed to pay off a debt given fixed monthly payments and a constant interest rate.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning, debt management, and understanding the true cost of carrying credit card debt.

4. Using the Calculator

Tips: Enter your current balance, planned monthly payment, and annual interest rate. The calculator will show how many months it will take to become debt-free.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payoff time show infinity?
A: This happens when your monthly payment is less than the monthly interest charges, meaning you'll never pay off the debt at that payment rate.

Q2: How accurate is this calculator?
A: It's mathematically precise for fixed-rate cards with consistent payments. Variable rates or changing payments will affect actual payoff time.

Q3: What's the best way to pay off credit card debt faster?
A: Increase monthly payments, reduce spending, or transfer balances to lower-rate cards. Even small payment increases can significantly reduce payoff time.

Q4: Does this account for minimum payments?
A: No, it assumes you'll make the same fixed payment each month. Minimum payments typically extend payoff time dramatically.

Q5: Should I include new purchases in the balance?
A: For most accurate results, use your current statement balance and avoid making new purchases until the debt is paid off.