Credit Card Payoff Calculator

Credit cards use daily periodic rate compounding: divide your APR by 365 (or 360, varies by issuer) to get the daily rate, then apply that rate to your average daily balance each billing cycle. The compounding makes the effective annual rate (EAR) slightly higher than the stated APR, by about 1-2 percentage points for typical card APRs. New purchases usually have a 21-25 day grace period if the previous balance was paid in full; carry any balance and the grace period vanishes for the next cycle.

Mathematically, highest APR first ("avalanche method") minimizes total interest paid. Psychologically, smallest balance first ("snowball method") provides faster wins that build momentum. Research suggests snowball improves persistence; avalanche saves more money. Pick whichever you'll actually stick with, a completed snowball plan beats an abandoned avalanche plan. For tied-priority balances, default to highest-APR.

A balance transfer moves debt from one card to another that offers a low (often 0%) introductory APR for 12-21 months. Transfer fees are typically 3-5% of the transferred amount. Worth it if: you can pay off the balance within the promo window, the transfer fee is less than what you'd otherwise pay in interest, and you don't add new charges to either card. Risky if: you keep adding to the balance, miss a payment (which can void the promo APR), or can't pay off before the rate jumps.

Usually it helps. Lower utilization (balance ÷ credit limit) is a major factor in credit scoring; getting it under 30% (and ideally under 10%) raises your score. Closing a paid-off card can briefly lower your score by reducing total available credit and shortening average account age, so consider keeping old cards open even if you're not using them. Pay off, but don't necessarily close.