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How long to pay off a credit card (and how to cut it)
The minimum payment is designed to keep you paying. Here is how long a balance really takes to clear, and what each extra dollar changes.
You pay every month and the balance barely moves. That is not bad luck. It is how minimum payments work.
Why the minimum takes so long
Most of a minimum payment goes to interest. Only a small slice reduces what you owe, so next month the interest is almost the same again.
Federal rules under Regulation Z (Truth in Lending) make issuers print a minimum payment warning on your statement: how long payoff takes at the minimum and the monthly amount to pay it off in three years. The CFPB recommends reading that box first.
Calculator: what your credit card debt really costs
Revolving balances carry some of the highest rates around. See where the debt is heading.
If your monthly payment is smaller than the monthly interest, the debt grows even while you pay. That is the sign that renegotiating stopped being an option and became necessary.
The math for $3,000 at 24% APR
Same balance, three different monthly payments, with interest charged every month:
- $90 a month: about 56 months (almost 5 years) and roughly $1,993 in interest.
- $150 a month: about 26 months and roughly $870 in interest.
- $250 a month: about 14 months and roughly $465 in interest.
Going from $90 to $150 a month cuts the time in half and saves more than $1,100. Use the calculator below with your own balance and rate.
Five ways to cut the payoff time
- Pay a fixed amount, not the minimum. The minimum shrinks as the balance shrinks. A fixed payment does not.
- Stop new charges on the card you are paying off.
- Ask for a lower rate. A short call with a good payment history sometimes works.
- Consider a balance transfer if you can pay it off inside the promotional period, including the transfer fee.
- Send windfalls to the card: tax refunds, bonuses, sales of things you no longer use.
After it is paid off
Keep paying the same amount, now into savings. You already live without that money, so it becomes an emergency fund without any new sacrifice.
Frequently asked questions
Where can I see my payoff time?
On your statement. The Truth in Lending rules require card statements to show how long it would take to pay the balance making only minimum payments, and what it would cost.
Does paying twice a month help?
It can, a little. Paying earlier lowers the average balance the interest is calculated on, and it avoids late fees.
Should I close the card after paying it off?
Not necessarily. Closing an old card can lower your available credit and affect your score. Keeping it open with no balance is often better.
Is it better to pay the card or save?
Keep a small emergency cushion first, then attack high-interest card debt. Card interest usually costs far more than savings earn.
Have more than one card? Decide which one gets the extra money first.