Credit cards payment calculator is useful in determining essential information to help you manage card debt pay-off.
The calculator is capable of showing the repaying period and the amount of payment for interest and fees.
However, consumer should take note that credit cards payment calculator are assuming some aspects such as:
- The calculator is assuming that the cardholder will not make further charges on the card and will just be paying the current balance.
- Credit cards have different interest rates on balance transfers. It is crucial to check that you are utilizing the right interest rate.
- Other fees such as late fees and transaction fees will not be included in the computation results.
- The calculator is generic and other financial analysts may provide different computation.
- The users have an understanding that the card calculator is only a tool in financial planning and it will not provide any advice. The decisions you are going to make is entirely your own. You may choose to seek the services of an independent financial consultant should you need a professional advice.
How does Credit Cards Payment Calculator Works
You can do payment calculation from three options. The results depend on your inputs, these are:
- Pay-off by paying only at minimum payment.
- Pay-off by in given number of years.
- Pay-off by paying a fixed amount each month.
Let us assume a credit card debt of $3000 at an annual percentage rate of 19%.
Paying only at minimum payment
The initial estimated minimum payment would be at $60. The card debt will be paid-off in 30 years and the corresponding interest for that period would be $8,598.
Paying at given number of years
If you choose to pay the balance in three years, you need to pay $110 monthly. The total interest charge until the debt is paid-off is $959.
Paying a fixed amount each month
Assuming you choose to pay $200 every month, you estimated pay-off time would be 18 months. The related interest rate for this period of payment would be $453.
Making your Own Assessment Utilizing Results from Card Calculator
With the results of the credit cards payment calculator on hand, you now have the opportunity to make your own assessment to choose the best option in paying-off your credit card debt.
- If you want your payments to be simple without taking into consideration the length of time involve, then you can settle in paying only the minimum.
- Other consumers would want to debt free at a specific time or they may be using their credit card once again. They can choose to pay-off their debt in less number of years.
- If cardholder can commit a bigger amount of payment, then he may take advantage in paying with such amount. In doing so, he will be able to settle the debt in less time and save from paying so much on interest.
Having the technology of a credit cards payment calculator provides the convenience of knowing options useful in managing credit card debt very well.