Credit card interest and payoff calculator

Card issuers typically charge interest daily, using the annual rate divided by the days in the year, on balances you don’t pay off by the due date. If you pay your full statement balance on time, new purchases usually don’t attract interest thanks to the grace period, which is at least 21 days.

Most of an early minimum payment goes to interest, so the balance falls slowly and payoff can take many years. Canadian card statements generally show an estimate of how long it would take to pay off the balance with minimum payments only.

Pay your full statement balance by the due date every month. Interest usually applies only to the unpaid balance, and cash advances generally start charging interest right away.

It depends on your rate and payment. For example, at about 21% and $250 a month, the balance takes roughly two years to clear and costs over $1,000 in interest. Enter your own numbers above for your estimate.

Credit card rates are usually much higher than what savings earn, so paying down a card balance often gives a better return than saving the same money. Many people keep a small emergency fund while they pay off card debt.

It can. Paying more lowers your balance compared with your limit, known as credit utilization, which is one factor in credit scores. Paying on time matters most.