OraA transparent monthly approximation
For each modeled month, interest = opening balance × APR ÷ 100 ÷ 12. Round interest to minor units, add it to the balance, then subtract the chosen fixed payment. The last payment is capped at the remaining balance plus interest.
This is not a reproduction of a card issuer's statement. CFPB: how credit-card interest is calculated explains that many issuers calculate interest daily and can apply different rates to different balance categories. Payment dates, grace periods and promotions can materially change actual charges.
A 2,000.00 balance and a 100.00 payment
Assume a constant 24% APR and no new spending, fees or rate changes. First-month modeled interest is 2,000 × 0.24 ÷ 12 = 40.00. A 100.00 payment reduces principal by 60.00, leaving 1,940.00.
With monthly cent rounding, the balance clears in 26 months. The last payment is 79.75; total interest is 579.75. An actual daily-accrual statement will generally differ from this monthly estimate.
A payment must cover more than interest
If the chosen payment is no greater than modeled interest, the balance cannot decline under these assumptions. Increasing a payment can shorten payoff time, but the amount needs to be realistic and at least satisfy the actual minimum due.
The issuer's minimum payment can change with the balance. This tool holds your chosen payment fixed; it does not model an issuer's minimum-payment formula or allocate payments across several APR categories.
When several balances compete for the same payment budget, the debt-payoff strategy calculator explores allocation across debts rather than this single balance. The principal-and-interest explanation helps explain why reducing a balance earlier can change later charges.
Reconcile with the statement
Check the APR for the carried balance, expiry of promotional rates, charges since the statement date and payment posting dates. If new purchases continue, include their effect in a separate budget rather than treating the no-new-spending payoff date as a promise.
Common questions
Why does my statement show different interest?
Many cards use daily balances, actual cycle dates and multiple APR categories. This tool uses a single monthly approximation.
Does the result assume I stop spending on the card?
Yes. It assumes no new purchases, cash advances, fees or changes to the rate.
Can I enter my minimum payment?
You can model a fixed amount, but the issuer’s required minimum may change. This estimate does not replace the payment due on your statement.
Educational estimate using the stated assumptions. Fees, taxes, changing rates and individual circumstances can change an outcome. This is not personalized financial advice. Read the estimates disclaimer.