Credit card repayment calculator

How to pay off your credit card balance faster

1. Making larger fixed payments every month helps you pay off your credit card debt quicker and saves you money in interest.
2. Switching to a balance transfer credit card could help if you've reached the end of a 0% interest period and still have an outstanding balance on another credit card. Balance transfer cards usually have a lower interest rate or 0% interest for a fixed period of time, letting you pay off the balance of the card without having to pay interest too. They usually have a fee attached, though, typically ranging from 3%-4%.

Here’s an example of how differences in the monthly repayment can significantly reduce the time to repay and interest cost: 

Please note: this example assumes no additional spending or fees.

Credit card terms explained

• Outstanding balance — How much do you have to pay off on your credit card?
• Interest rate — This is used to calculate the cost of borrowing.
• Minimum payment — This is the amount you must repay each month. If you don’t, you’ll break the terms of your agreement. It’s usually whichever is higher, a fixed percentage of the outstanding balance, or a flat fee. Your minimum payment is based on the amount you borrow, the interest rate and your credit score. This may also vary between credit card providers.
• Fixed amount — If you’re not just paying the minimum payment, this is an amount that you’ve chosen to pay off your balance each month.

What happens if I only pay the minimum amount on my credit card?

If you only pay the credit card’s minimum payment, it will take much longer to pay off your credit card balance. This will make the card more expensive in the long term, as you pay more in interest.

Also, if you only pay the minimum payment over an extended period (for example, 18 months) your credit card provider may consider you to be in ‘persistent debt’. This could damage your credit score and could even see your card suspended.

What happens if I miss a credit card repayment?

If you miss a credit card repayment, are late repaying or pay less than the minimum payment, you’ll be considered behind with payments and be charged a late payment fee.

You may also lose any introductory benefits or interest rates. For example, if you were benefiting from a 0% interest rate, you may be forced to begin paying interest, which will obviously affect your repayment plan.

Finally, missing a credit card repayment will likely negatively impact your credit score. This could make it more difficult, or expensive, to borrow again in future.

Learn more about how late payments affect your credit score.