# Credit Card Pay Off Goal Calculator

Want to pay off your credit cards early? Use this free credit card repayment calculator to find out how long it will take you to pay off your debt with current payments, and how much you'd be required to pay monthly to eliminate credit card debt sooner.

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## Make a Plan to Eliminate Credit Card Debt

Credit card debts can strangle your personal finances. With interest rates averaging just over 13 percent, you are likely to pay the highest interest rates on your credit cards than on any other debts you carry. Some credit cards can charge rates as high as 29.99 percent.

At least half your minimum payment goes toward interest. In fact, if you only make the minimum monthly payment toward your credit cards, you will only be paying down about 1 percent of your principle. At that rate, you could spend years and thousands of dollars paying off your credit cards, tying up your finances each month when they could be put toward more productive goals, such as creating a down payment for a home or investing in high-yield assets.

By paying off your credit cards as quickly as possible, you can re-invest your money to make it work for you.

### Avoiding the Minimum Payment Trap

Credit cards offer revolving credit, which might make you feel like there’s no need to pay it off. After all, you might want to use the credit cards to make a purchase, and then you’ll just have a new balance, and the process will repeat itself over and over again. Why not just pay the minimum so you can free up your money for other things you want to do?

The problem is that you’ll continue to compound your interest and grow your debt if you only ever make the minimum payment and continue to use your credit cards. Even if you stop using your cards, you’ll only chisel away at your debt by paying the minimum each month. You’ll end up paying much more than you need to by the time the debt is settled, and you’ll take so long to pay it off that your finances will be paralyzed and you won’t be able to work toward other financial goals.

Consider this scenario: You have \$15,000 in credit card debt (right around the national average), and you pay a 13 percent interest rate. If you pay a minimum payment of \$300 a month, it would take you 30 years and seven months to pay off your debt. You’ll also pay \$11,719 in interest.

That’s 30 years that you’ll have \$300 of your money tied up each month. That’s 30 years that you won’t be able to use that credit card just so you can actually pay off your balance.

To gain financial freedom, you’re going to have to pay down those credit card debts as quickly as possible. Before you can determine the right amount to pay each month, you need to set a goal for your payoff date. You can use our free calculator to determine how much you would need to pay each month in order to meet the goal. If the payment is too much, you can readjust your payoff date until you find the right balance between a payment that meets your monthly budget and a payoff date that meets your financial goals.

Consider the previous scenario: If you increased your payment to \$350 per month, you could drastically reduce the time it took you to pay off your debt. In fact, you could pay it off in just under five years.

Once you have a plan in place for paying off your credit card debt, you can use our investment calculators to determine how much money you can make by putting that previous credit card payment toward an annuity, CD or other investment. You can use the money to put together a big down payment for a home, to buy a vacation home, or to plan for your retirement.

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