Credit card repayment calculator

Credit card repayment calculator

Enter your balance and your credit card's interest rate into the calculator. Then you can calculate:

• How long to repay the balance. Enter the amount you want to repay each month to calculate how long it will take to repay the balance.
• How much it will cost to repay the balance in a given time. Or you can enter the amount of months you want to take to repay the card and it will will give you the amount you need to repay each month.

4 tips for using this credit card calculator

1. To calculate how long it will take to pay off your credit card: Put how much you want to pay in the "Monthly Payment" section. You'll then see how many months and years it would take to pay off your credit card based on your balance and interest rate.
2. To calculate how much you need to pay to meet a goal: Put your goal or deadline in the "Payoff Goal" section and the calculator will show the required monthly repayment for that goal. You can also see how much interest will be charged.
3. To calculate how much interest you can save: Choose a higher amount for the "Monthly Payment" section and put the "Months to Payoff" calculation into the "Payoff Goal" section.
4. Try entering a different interest rate. If you are looking for a credit card with a lower rate, compare cards and then see what your interest charges look like if you switched to one with a lower rate. Just remember that this calculator doesn't include the cost of any annual card fees.

How is credit card interest calculated?

When you get your credit card statement each month, you'll see both the closing balance and a "minimum monthly repayment" amount.

You have to repay the minimum monthly repayment amount. Or you can:

• Pay off the entire balance. This means you have no unpaid balance and you won't incur future interest charges.
• Repay part of the balance (but not the whole amount). Paying more than the minimum amount helps you save on interest and clear the balance faster.

How credit card interest compounds

If you don't pay off your credit card spending, you get charged interest on the unpaid balance. This interest is added to your total balance.

If you fail to repay your balance over time, your debt can grow because you end up getting charged interest not just on the original balance but the balance plus the previous interest charges. This is called compound interest.

It's why you should pay off as much of your monthly statement balance as you can. Otherwise your card balance might keep on growing.

What is the minimum I need to pay on my credit card?

Your credit card statement will show a minimum monthly repayment amount and a due date for when you need to pay at least that much off the balance.

The minimum repayment is set by your credit card issuer and is usually calculated as 2% to 3% of your closing balance, or a minimum dollar value. You have to pay whichever of the 2 figures is the highest.

For example, let's say your card has a minimum monthly repayment of "2% of your balance or $40, whichever is higher." You have an unpaid card balance of $1,000. 2% of $1,000 is $20, so your minimum repayment is therefore the higher amount of $40.

Minimum monthly repayment requirements for various credit card issuers

• American Express credit cards. The higher of $30 or 2.5% of your closing balance
• ANZ credit cards. The higher of $25 or 2% of the closing balance
• CommBank credit cards. The higher of $25 or 2% of the closing balance
• NAB credit cards. The higher of $25 or 2% of the closing balance
• St.George credit cards. The higher of $10 or 2% of the closing balance
• Westpac credit cards. The higher of $10 or 2% of the closing balance

Do I need to calculate the minimum repayment?

No, the minimum repayment amount is shown in dollars on your credit card statement. So you won't have to calculate the percentage owed if you carry a balance.

Your credit card statement will also show calculations for how long it will take to pay off your card if you only pay the minimum amount.

If you want to see how much faster you can repay your balance, just put the details into the repayment calculator and adjust the "Monthly Payment" or "Payoff Goal" field to calculate how much you'd need to pay each month (assuming you are not making new purchases).

What will happen if I just make the minimum credit card repayment?

You'll only pay off a small percentage of your credit card balance if you just make the minimum repayment listed on your credit card statement. Interest will also be charged on the rest of your balance – and any new spending – until you pay it all off.

In a worst-case scenario, only making the minimum repayment required could cost you hundreds or thousands of dollars in interest over time, and it could take years to pay back.

What if I can't pay more than the minimum amount?

If you can't make the minimum monthly repayment then your card provider may charge a late payment fee. If you're continually unable to repay any of your credit card spending your card debt, including interest charges and fees, will only grow.

• Stop spending on your credit card, as this will only add to your ongoing costs.
• If you're struggling to pay off your credit card, you can call your credit card provider to talk to them about support options, repayment plans or hardship assistance.
• Contact the National Debt Helpline on 1800 007 007 to speak to a financial counsellor for free.

If you're able to make repayments on your card debt, but your card has a really high interest rate, consider a balance transfer credit card.

These cards offer new customers an introductory period of 2 years or more at 0% interest on your unpaid balance. This gives you time to pay off the balance from your old card without a high interest rate adding to your debt burden.

But if you don't repay the balance during the balance transfer period you could end up paying a lot more interest later.

Frequently asked questions

• Should I use a credit card payment calculator?

  A credit card payment calculator can help you determine how long it will take you and how much it will cost to repay your credit card debt. If you're struggling to repay your debt or need to create a budget plan to pay it down, you could find a credit card payment calculator useful.

• What happens if I fail to make even the minimum monthly payment before the due date?

  You will usually be charged a late payment fee. Missing the minimum monthly payment will also leave a negative mark on your credit file, which could impact your likelihood of getting approved for other loans in the future. If you fail to pay the minimum amount, your debt will also continue to grow with interest (making it potentially even more difficult to pay off in the future).

• Where can I find out how much my minimum repayment is?

  Your minimum repayment amount will be included in your monthly credit card statement. However, you can also see the card reviews on Finder or read your card's product disclosure statement (PDS) to confirm what the exact minimum repayment amount is.

• Will I still be charged interest if I make the minimum repayment?

  Yes, interest charges will still apply to the remainder of the balance you haven't paid off. So if your minimum repayment is 2%, you'll collect interest on the remaining 98% of your balance.

• Is there anything I can do to reduce the interest charged on my debt?

  Yes, here are a few options you can consider depending on your circumstances:

  • If you have existing credit card debt. You may wish to move it to a new balance transfer credit card that offers an introductory low or 0% interest rate.
  • If you have upcoming purchases you need to make. You could look at a card with an introductory 0% purchase rate.
  • If you often carry a balance. Switching to a card with a low ongoing interest rate could help you save on interest charges when compared to cards with higher interest rates. But it would still be ideal to pay more than the minimum and avoid carrying a balance whenever possible.

Written by

Richard Whitten

Money Editor

Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 609 Finder guides across topics including:

• Home loans
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• Personal finance
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