Tools / Debt
What does this debt really cost?
Enter a balance, the interest rate, and how you pay. The calculator runs the repayment month by month and shows how long the debt takes to clear, the total interest in euros, and how much of each payment reaches the debt at all.
Time to clear
18 years 11 months
Total interest
- €5,963
Total paid
- €8,963
First payment
- €55 of €76is interest
Arithmetic from the numbers you entered, nothing more: interest accrues at one-twelfth of the yearly rate each month, and each payment covers that month's interest before it touches what you owe.
A worked example
The same €3,000 balance at 22%, cleared four different ways. Only the payment changes; the arithmetic does the rest.
| Repaying €3,000 at 22% | Time to clear | Total interest |
|---|---|---|
| Minimum only (2.5%, never less than €25) | 18 years 11 months | €5,963 |
| €90 a month, fixed | 4 years 4 months | €1,679 |
| €150 a month, fixed | 26 months | €771 |
| €300 a month, fixed | 12 months | €345 |
How the arithmetic works
A card balance accrues interest every month at one-twelfth of the yearly rate (the APR on your statement), so a €3,000 balance at 22% grows by €55 in its first month. Each payment covers that interest first; only what is left over touches the debt itself. When the payment is small, most of the money you send never reaches the balance, which is why the first-payment split above is worth a look before anything else.
The minimum-payment mode uses the formula most cards use: 2.5% of what you owe, never less than €25. Because the minimum is a percentage, it shrinks as the balance shrinks, and the repayment stretches out for years. On that €3,000 at 22%, minimums alone take almost nineteen years and cost €5,963 in interest, roughly twice the debt. A fixed payment behaves differently: it stays the same while the interest portion falls, so each month a little more of it lands on the balance and the end arrives sooner than the start suggested.
Every figure here is arithmetic from the numbers you entered, nothing else: no fees, no rate changes, no new purchases on the card. Real statements include all three, so treat the result as the clean version of the story, and the real one as slightly worse.
This calculator is the companion to Credit cards and debt, which walks through the two modes of a credit card, the avalanche and snowball methods for existing debt, and what credit scores actually do.
Questions
- How is credit card interest calculated?
- Most cards charge interest monthly, at one-twelfth of the yearly rate (the APR on your statement). On a €3,000 balance at 22%, that is €55 in the first month. Interest that goes unpaid joins the balance, so the next month charges interest on the interest.
- What is a minimum payment?
- The smallest amount your card lets you pay while staying in good standing. A common formula is 2.5% of what you owe, never less than €25. Because the minimum shrinks as the balance shrinks, paying only the minimum stretches repayment across years: €3,000 at 22% takes almost nineteen years and costs €5,963 in interest.
- Why does my balance barely move when I pay?
- Each payment covers that month's interest first; only what is left over reduces the debt. When the payment is close to the monthly interest, almost nothing reaches the balance. A payment below the monthly interest does not reduce the debt at all: the balance grows.
- Is this calculator financial advice?
- No. It is arithmetic on the numbers you enter, with no fees, rate changes, or new purchases included. It shows what a balance, a rate, and a payment imply; the decisions stay yours.
Also in tools: the compound interest calculator, the same arithmetic with the sign flipped in your favour.