Credit card repayment calculator

Find out how much you need to repay each month to clear your balance, the amount of interest you'll pay and how to save money.

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By

Richard Whitten

Edited by

David Gregory

Updated

When you get your credit card statement each month, you'll see both the closing balance and a "minimum monthly repayment" amount. Paying more than the minimum amount helps you save on interest and clear the balance faster but "how much" is different for everyone.

Credit card repayment calculator

You can use this calculator to see how long it will take you to pay off your card and how much you could save on interest by switching cards or making bigger repayments. Just put your balance and interest rate into the calculator to get started.

Credit card info

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Calculate months to pay off

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Calculate monthly payment

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*Whilst every effort has been made to ensure the accuracy of this calculator, the results should only be used as an indication. They are neither a recommendation nor an eligibility test for any product and should not be construed as financial advice, investment advice or any other sort of advice.

3 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.

How is credit card interest calculated?

Credit cards accrue what's known as compound interest, which is calculated as a fixed percentage of your balance – including any existing interest charges. This means the interest builds up over time and, if you pay too little off your balance, you'll end up with even more interest charges to pay off.

In a worst-case scenario, you could end up paying interest on your interest, adding to the cost and time it takes to pay off your credit card. This is why it is critical to pay off as much of your monthly statement balance as you can.

How different types of interest rates work

Do you have credit card debt?

Australians have $18.1 billion of credit card debt accruing interest according to Reserve Bank of Australia data for September. Individually, the average Australian has $1,157 of credit card debt, according to October data from our consumer sentiment tracker. It peaked in January ($1,967) and has slowly been declining throughout the year.

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, with a minimum dollar value of around $20 to $30.

As a basic example, if you had a $2,000 balance on your credit card, your minimum repayment would usually be around $40 to $60. If you owed a smaller amount, say $500, you'd typically need to pay a minimum dollar value of $20 to $30.

Minimum monthly repayment requirements for some popular 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. That's why it's important to pay as much as you can off your balance or even pay the whole balance off in one go.

Example: Paying the minimum amount vs a higher amount on your credit card

Let's say you have a $5,000 debt on a credit card with an interest rate of 15% p.a., and you want to work out the most efficient way to pay down the debt.

In this scenario, the minimum monthly payment on your latest credit card statement is $100. This is calculated as the greater of $20 or 2% of the closing balance and will be adjusted for each future repayment. You also want to know how much you can save if you start putting money aside and paying $250 off your card each month.

Minimum monthly repaymentsHigher monthly repayments
Credit card balance$5,000$5,000
Interest rate15% p.a.15% p.a.
Monthly repayment amountThe greater of $20 or 2% of the closing balance$250
Total time to pay off debt24 years 5 months2 years
Total interest paid$7,245.78$789.73
Total amount saved-$6,456.05

In this example, making higher repayments would save you $6,456.05 in interest charges – and you'd repay it all in just 2 years compared to 24 years and 5 months.

What this shows is that any repayment you make that's worth more than the minimum amount will help you pay off your balance faster and save on interest charges.

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

If you're struggling to pay off your credit card, you can call your credit card provider to talk to them about support options. Or, contact the National Debt Helpline on 1800 007 007 to speak to a financial counsellor for free.

Another option is to look at transferring the balance to a card that offers 0% interest on balance transfers. This means you can repay your debt interest-free for a promotional period, such as 0% p.a. for 24 months. At the end of the introductory period, a higher interest rate will apply to any remaining part of the balance.

Keep in mind: With a 0% balance transfer offer, you usually need to pay more than the minimum amount to completely pay off your debt before a higher interest rate applies.

For example, if you had a credit card debt of $2,000 and a card with 0% on balance transfers for 12 months, you'd need to pay $250 per month to clear the debt within a year and before you start accruing interest. So you may end up paying more upfront, but your overall interest costs will be less and you'll clear the balance faster if you can pay more than the minimum requirement.

Compare savings with our credit card balance transfer calculator

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To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.
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Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

Richard's expertise
Richard has written 554 Finder guides across topics including:
  • Home loans
  • Property
  • Personal finance
  • Money-saving tips
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2 Responses

    Default Gravatar
    KumarMarch 14, 2014

    Hi

    I want to work out how much monthly payment will come to for $6000 balance on a 0% balance transfer for 12 months ?

    Thanks

      AvatarFinder
      JacobMarch 17, 2014Finder

      Hi Kumar,

      Thanks for your question. To pay back the $6,000 over 12 months at 0% p.a. you’ll need to pay at least $500 each month.

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