The Interest and Payment Formulas
Each month, interest accrues as: Interest = Balance × (APR ÷ 12 ÷ 100). For a 22% APR card, the monthly rate is 1.833%. On a $5,000 balance, that is $91.67 in interest for the first month.
For the 12, 24, and 36-month plans, the required payment uses standard loan amortization: M = P × r ÷ (1 − (1 + r)^−n) where P = balance, r = monthly rate, and n = target months. If APR is 0%, the payment is simply P ÷ n.
The Minimum Payment Trap
At 22% APR on a $5,000 balance with a 2% minimum payment rate, the initial minimum is $100. But because the minimum shrinks as the balance falls, the total payoff time is approximately 22 years and total interest paid is roughly $6,500 — more than the original balance.
In month one, roughly $92 of that $100 payment is interest. Only $8 reduces the balance. The balance barely moves, so next month's interest is nearly identical. A fixed payment of $150/month on the same balance at the same rate clears the debt in about 44 months and costs roughly $1,600 in interest — $4,900 less than minimum-only.
Fixed-Term Plans vs. Minimum Payments
The 12, 24, and 36-month strategies give you a specific end date and a known total cost. For a $5,000 balance at 22% APR: a 12-month payoff requires about $470/month ($640 total interest). A 24-month plan requires about $256/month ($1,144 total interest). A 36-month plan requires about $191/month ($1,870 total interest).
Note that the 36-month plan costs more interest than the 24-month plan — carrying the balance longer outweighs the lower payment. The 24-month plan is often the best balance of payment size and total interest for mid-range balances.
What This Calculator Does Not Cover
This tool calculates payoff for a single credit card with a fixed balance. It does not account for new purchases, promotional 0% APR periods, balance transfer fees, annual fees, or late fees. If you add new charges while paying down, the actual payoff date will be later than shown. For multiple cards, the avalanche or snowball method requires a separate multi-debt calculator.