How to calculate credit card costs
Use the credit card calculator above to help add up the costs onyour credit card.
Our credit card calculator will show you how long it will takeyou to pay off your balance based on what you repay each month,and how much it will cost you overall.
Just enter your current balance, APR and monthly repayments. Youcan then adjust your monthly repayments to see how paying moreor less each month will change your debt.
How does credit card interest work?
Credit card interest is typically charged on a monthly basis asa percentage of your balance. Your balance is spending made onthe credit card that you haven’t paid off.
Typically most purchases you make on your card will be free ofinterest charges for 56 days after the purchase, but if youhaven’t paid them off in that period the interest charges arebackdated. Some cards also offer specific ‘0% purchase’ periodsthat let you pay no interest for longer.
You can avoid paying interest on your balance by paying it offin full and before the end of the month. If you can’t pay it offin full then your balance will accumulate interest charges.
If you fail to make a payment then it’s likely you will becharged interest and a penalty fee, and it will show up on yourcredit report, negatively affecting your credit score.
The more you can pay back each month, the less interest you willend up paying overall. The longer you take to pay off yourbalance, the more you will end up paying.
Interest is different from the Annual Percentage Rate (APR)which factors in a number of costs, not just the rate onpurchases, balance transfers, but also annual fees, ifapplicable.
The results from the credit card calculator are representativeand not a guarantee of the exact figure you will end up paying.
Should I just make the minimum repayments?
No. In the world of credit cards one of the worst things you cando if just make your minimum repayments. Minimum repayments arejust that – the bare minimum – and are a sure-fire way of payingtoo much interest.
Paying off your debt using minimum payments ensures that yourdebt will last as long as possible, and the credit company willcharge you’re the maximum amount of interest.
How can I pay less interest?
There are two main ways to pay less interest: pay more a monthor transfer to a balance transfer card
Increasing your monthly payments will always be beneficial toyour credit card debt as it will speed up how quickly you canpay your card off and therefore reduce the amount you pay ininterest overall.
Crucially however it should be based on what you can afford.There’s no point paying off more of your credit card balance ifit leaves your overdrawn at the end of the month, or missingbill payments.
That’s when balance transfer cards can be helpful. If your debtis significant and your struggling to increase your minimumpayments you can shift the debt for a one-off fee. That thengives you a grace period within which you can pay off your debtwithout worrying about interest payments.
Could a balance transfer card help?
If you’re struggling to pay off your balance and are facingsignificant interest payments as a result, you could also applyfor a balance transfer credit card. Balance transfer cards allowyou to transfer your current credit card’s debt over to a newcredit card provider. You will usually pay a one-off transferfee, which can range from around 1% to 3% of the amount youtransfer.
Once you’ve transferred the balance, you will be given a longerperiod of time to pay it off with 0% interest.
Balance transfer periods range from 6 months to three years. Thelonger the balance transfer period, the more likely you are torequire a higher credit score.
Why don’t I just keep transferring my debt using balancetransfer cards?
Whilst balance transfer cards can be a great fix they aren’t along-term solution for a number of reasons.
Firstly, you can’t transfer a balance from one provider to abalance transfer card issued by the same provider, so youroptions are limited.
Secondly, every time you transfer a balance you will most likelybe charged a percentage of your balance as a transfer fee.
But most crucially if you fail to clear the debt within the 0%period your balance transfer card will revert to a standardinterest rate. If you can’t then transfer your balance toanother provider you will end up paying a lot for your 0% debt.