How long will it take to pay off my credit card making minimum payments?

Making only minimum payments (typically 2-3% of balance) can take 10-30+ years to pay off a credit card, with interest costs potentially exceeding the original balance. For example, a $5,000 balance at 18% APR with $100 minimum payments takes 7 years and costs $3,200 in interest.

What is credit card APR and how is interest calculated?

APR (Annual Percentage Rate) is your yearly interest rate, but credit card interest compounds daily. Divide APR by 365 to get daily rate, multiply by your daily balance, and sum for the month. For example, 18% APR is about 0.0493% daily, adding up quickly on unpaid balances.

How much should I pay on my credit card each month?

Pay the full statement balance monthly to avoid interest entirely. If carrying a balance, pay as much as possible above the minimum. Even doubling the minimum payment dramatically reduces payoff time and total interest. Aim to pay off high-interest credit card debt as your top financial priority.

What's a balance transfer and should I use one?

Balance transfers move high-interest debt to a card offering 0% APR for 12-21 months, typically with a 3-5% transfer fee. This can save thousands in interest if you pay off the balance during the promotional period. Only do this if you'll aggressively pay down the debt, not just delay the problem.