September 19, 2017
 
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Credit Card Calculator - Minimum Payment vs. Fixed Payment

Use this Credit Card Calculator:
Are you among the millions of credit card users who only make the minimum payment each month? If you’re not paying off the balance every month, you may be shocked to know how much more money you end up paying above and beyond the cost of your goods. Of course, the creditors are laughing all the way to the bank. The total amount depends on your interest rate and whether you pay the minimum amount required or as much as you can.

Minimum Payment Required:
Many young people new to the credit world typically pay what the statement recommends—nothing more, nothing less, not thinking to send in more. Others who just aren’t that interested in the math simply pay the minimum. However, it’s crucial to educate yourself on how the
credit card companies calculate what you owe them so you understand how much you pay in the end. Minimum payments on credit card debts are calculated as a percentage of the current balance. They go down as the balance goes down, however, because of compounding interest, consumers end up paying over a longer period of time.

Find out how much interest you’ll pay over the life of your debt by entering your numbers using this calculator. First try it with your minimum payment and then try it again using a fixed payment. You’ll see how much less you’ll pay in interest over a shorter period of time if you pay the same amount every month.

 

 

Enter your credit card balance (no commas):        $

 

 

Enter your interest rate:

How is your minimum payment calculated?

(Check the back of your statement)

 

Your minimum payment is:                           $

 

What fixed payment can you afford every month?                                                                       $

 

Choose a payment schedule based on:                 Minimum payment

                                                                                                            Fixed payment

Calculate

 

Reset

                                                                                                                       

 

3000

 

 

Example:

Enter your credit card balance (no commas):        $

25%

Enter your interest rate:

Interest + 1% of balance

How is your minimum payment calculated?

(Check the back of your statement)

91.88

Your minimum payment is:                           $

200.00

What fixed payment can you afford every

month?                                                                       $

 

                        Choose a payment schedule based on:                 ¡ Minimum payment

                                                                                                            ˜ Fixed payment

Calculate

 

Reset

                                                                                                                       

If you pay the fixed amount every month, it will take you 19 months to be debt free. During that time, you’ll pay $634.68 in interest.

If you pay just the minimum payment every month, it will take you 281 months to pay off your balance and you would pay $5,914.58 in interest. Remember, this is with no new charges.

It’s amazing how much you can save in time and money when you stick to a fixed amount each month. Hopefully, this will renew your motivation to adjust your budget to pay your debt off quickly.

 

 

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