How to Calculate Credit Card Payoff Date
Developing a monthly payoff plan is a great way to get on track to being debt-free. By calculating the amount owed, plus the interest rates of various debts, you'll be able to determine when you will be out of debt. Here's how to find that payoff date.
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Instructions
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Gather all of your credit card information. For each credit card, gather the paper statement or open the window to the online banking interface on your computer.
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Input the balance of each credit card into a credit card debt calculator. The calculator will have a space for the "balance" of each card.
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Add the interest rate for each credit card. The calculator will have a column for the associated interest of each card. Add it in and hit calculate.
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Add the payments for each card. The calculator will ask you how much you want to pay for each card per month. Input that amount and hit "calculate."
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View your credit card payoff month. Once calculated, the calculator will tell you what month you will be debt free if your payments, balances and interest rates do not change. To figure out the actual day, look to your credit card statements and determine which due date is latest in the month. If you pay according to that schedule, then the last payment due in the month will be the actual day you are debt free!
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Tips & Warnings
Be sure to allow for any annual fees when calculating credit card payoff dates. Some more advanced calculators allow for this.
The more money you pay, the faster the credit cards will be paid off. Just a few dollars over the minimum balance due can make quite a difference over the long run.
Beware of balance transfer fees. If you transfer a balance to a lower interest rate, be sure that you understand the associated fees. Some fees are as as high as 5 percent, with no cap on the dollar amount charged. That would mean $500 for a $10,000 balance transfer.
References
- Photo Credit credit card image by feisty from Fotolia.com
