How credit card interest works
Credit cards charge interest every month on the balance you carry. Your APR is divided by 12 to get a monthly rate — a 22.9% APR is about 1.91% a month. On a $6,000 balance, that's roughly $114 of interest in the first month alone. Only the part of your payment above that amount actually reduces what you owe.
Monthly interest = Balance × (APR ÷ 12)
Why minimum payments take so long
Minimum payments are usually 1–3% of the balance plus interest. They're designed to keep you paying for years. Paying a fixed amount above the minimum — even $50 more — can cut years off your payoff time and save hundreds or thousands in interest.
Example
A $6,000 balance at 22.9% APR, paid at $250 a month, takes about 2 years and 9 months to clear and costs around $2,100 in interest. Raising the payment to $300 gets you debt-free 7 months sooner and saves about $470.
Fastest ways to pay off credit card debt
- Avalanche method: pay extra on the card with the highest APR first. This saves the most money.
- Snowball method: pay off the smallest balance first for quick wins that keep you motivated.
- Balance transfer: a 0% intro APR card can stop interest for 12–21 months, but watch the 3–5% transfer fee.
- Call your issuer: ask for a lower rate. It works more often than people expect.
Common questions
How long will it take to pay off my credit card?
It depends on your balance, APR and monthly payment. Enter them above to see your exact payoff date and total interest.
What happens if I only make the minimum payment?
Most of your payment goes to interest, so the balance falls very slowly. A few thousand dollars can take over a decade to repay at the minimum.
Is it better to pay off the highest interest or smallest balance first?
Paying the highest APR first (avalanche) saves the most money. Paying the smallest balance first (snowball) can be easier to stick with. Either beats paying the minimum.
Does paying off my credit card improve my credit score?
Usually yes. Lowering your balance reduces your credit utilization ratio, one of the biggest factors in your score.
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