Understanding the credit card payoff calculator
Credit cards carry the highest interest rates most households ever pay often 20 to 30% APR and interest compounds monthly on whatever balance remains. Minimum payments are engineered to barely outpace the interest, which is why a balance paid at the minimum can take decades to clear.
The escape is a fixed payment rather than the shrinking minimum: because the payment stays constant while the interest charge falls, an ever-growing share hits the principal each month. Run the calculator twice once at your current payment and once with $50 more and the difference in total interest usually makes the case better than any lecture.
Results are estimates for education only and are not financial advice.