This credit card interest calculator can figure either the level of your monthly payment or the term you can be debt free plus the total you pay in interest. There is in depth information on how to deal with your credit balance below the tool.

Credit card balance: *
Interest rate (APR): *
Desired months to pay off: *
Credit card balance: *
Interest rate (APR): *
Desired monthly payment: *

## How does this credit card interest calculator work?

The personal finance tool allows you simulate your credit card interest costs and decide on your best repayment plan. It has two tabs/sections each one being designed to handle one of the two methods it offers as explained within the next lines.

• First tab is designed to forecast the monthly payment you should be paying in such a way to payout within the term you specify. This approach requires you to give values for the credit card balance you owe, the APR interest rate and the desired number of months to pay off your balance.
• Second tab is designated to estimate the term supposed to payout the credit by specifying a certain level of monthly payment you can afford. Apart from the level of regular payment, in case of this method you have to be clear on the balance you owe and which is the interest rate assumed.

## Example of a result

Let’s assume that an individual owes a credit card balance of \$4,000 at an interest rate of 7% and wants to know which is the best option to pay it out and by each method which is the total interest paid. There are two strategies:

A) The person in question establishes a term to payout of 12 months and wants to see which is the monthly payment needed. By using this credit card interest calculator and filling in the data within the first tab the following estimation will be displayed:

Results:

■ Your monthly payment will be: \$346.11
■ Total interest paid: \$153.28
■ Total paid within 12 months: \$4,153.28

B) The person in question wants to pay \$500 per month tries to figure out when he will be debt free. He will fill in the data within the second tab and then he’ll receive the following data:

Result:

■ Term to pay off your balance: 8 months
■ Total interest paid: \$108.28
■ Total paid within 8 months: \$4,108.28

## How to deal with your credit card balance

Facilities offered by a credit card are often attractive but besides this you should know especially its disadvantages which relates to the fact that this financial product has probably one of the highest interest rates which is in the benefit of the lender. That is why dealing with this instrument it not that easy as it seems. It requires a tremendous personal finance discipline. Here’s what you need to know about dealing with credit cards:

• Use 0% interest on credit card balance ONLY when you are 100% sure that you can afford to pay back within the period specified in the offer. This is critical as this kind of offer comes with extremely high rates in interest afterwards.
• Don’t super estimate your affordability and use your credit card only when really needed and within certain limits your budget shows.
• Don’t underestimate your monthly current costs and expenses as you may then get surprised by a default.
• Try to payout your balance the sooner the better because this way you can make some savings in interest.
• Try to pay off according to an in advance established plan, because usually we tend to be unorganized when dealing with money and finally get in trouble.
• You can either opt for establishing a minimum monthly payment level and try to add whenever the case some extra, in such a way to be deft free as soon as you can; or you can set up a specific term to have a 0 balance and then figure out which is the minimum you have to pay regularly.
• Usually choose to use your credit card when you know you will manage paying back in a very short time period.
• Avoid financing other debts or loan payment you may have with your credit balance because this is a non sense from financial point of view. As credit cards have a higher cost than other products you will end paying even more on interest.
• Compare all the offers and choose the one that best fits your needs.

19 Dec, 2014