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The "hidden" cost of credit

How long will it take to pay off one of your credit cards, and how much in interest charges will you pay?  This is illustrated using the following examples for a card with a current balance of $3000. We have used interest rates from 6% (great credit) to 22% (bad credit or some store cards). If you need the payoff for a different rate or amount, try our debt payment calculator, or you can view our payoff table for estimates on various amounts and interest rates. If you want help paying off your debt, find out how to develop your own debt management plan.

Example 1 - Make the minimum payments (2% or $15) every month.

APR
Total Interest Paid
# of Monthly Payments

22%
20%
18%
16%
14%
12%
10%
 8%
 6%

$26,051
$12,125
$7,396
$4,994
$3,532
$2,544
$1,831
$1,290
  $865
  968 (80.67 years)
  524 (43.67 years)
  370 (30.83 years)
  291 (24.25 years)
  242 (20.17 years)
  208 (17.33 years)
  184 (15.33 years)
  165 (13.75 years)
 150 (12.5 years)

Example 2 - Pay 2% or $50 per month.

APR
Total Interest Paid
# of Monthly Payments

22%
20%
18%
16%
14%
12%
10%
 8%
 6%

$9,838
$5,419
$3,655
$2,647
$1,973
$1,483
$1,104
   $801
   $550
     247 (20.58 years) *
     164 (13.67 years) *
   130 (10.83 years)
  111 (9.25 years)
   98 (8.17 years)
   88 (7.33 years)
   81 (6.75 years)
   75 (6.25 years)
   70 (5.83 years)
* If you pay just $50 per month at 20% (or higher), you will NEVER pay off the balance!

Example 3 - Pay $100 per month.

APR
Total Interest Paid
# of Monthly Payments

22%
20%
18%
16%
14%
12%
10%
 8%
 6%

$1,395
$1,193
$1,015
   $856
   $713
   $584
   $466
   $358
   $258
  44 (3.67 years)
42 (3.5 years)
  41 (3.42 years)
  39 (3.25 years)
  38 (3.17 years)
  36 (3.00 years)
  35 (2.92 years)
  34 (2.83 years)
  33 (2.75 years)

As the above tables illustrate, making minimum payments can take most of your lifetime, assuming that you don't charge any more on the credit card. Worse, you could end up paying over 700% in total interest charges. The best case is like the last example where you pay a larger fixed amount every month, but even then a lower interest rate can save you more than half the interest charges of a higher interest rate card.

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  View our payoff table for various amounts and interest rates.
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