How long to pay off $3,000 on a credit card at 29.99% APR

How long to pay off $3,000 at 29.99% APR

Credit card interest is charged on your balance every month, so a small payment barely touches the debt: most of it goes to interest. Every extra dollar you pay above the minimum goes straight to reducing the balance.

What an extra $50 a month does

Paying $175 instead of $125 a month clears the balance in 23 months instead of 38, and cuts interest from $1,638 to $966, a saving of $672.

What the minimum payment really costs

If you paid only a typical minimum (about 1% of the balance plus interest, starting at $104.97), the balance would take far longer to clear. Using a fixed $105 payment as a rough guide, it would take about 4 years and 3 months and cost $2,327 in interest.

What a 0% balance transfer could look like

A 0% balance transfer card with a typical 3% fee would add $90 to the balance. To clear $3,090 within a 15-month promotional period you would need to pay about $206 a month. Compared with paying $125 a month at 29.99% APR, that would save about $1,548 in interest, if you clear it before the 0% period ends and your credit allows the transfer.

Ways to pay it off faster

• Pay more than the minimum, even by a small fixed amount, and keep paying that amount as the balance falls.
• Consider a 0% balance transfer card if you can clear the balance during the promotional period. Check the transfer fee, usually 3% to 5%.
• Use the avalanche method (highest APR first) to pay the least interest, or the snowball method (smallest balance first) if you need quick wins.
• Ask your card issuer for a lower rate. Some will agree if you have a good payment history.
• A nonprofit credit counselor can set up a debt management plan: look for one accredited by the NFCC.

What to check on your statement

Your statement shows the APR, the minimum payment and a warning of how long it would take to pay off at the minimum. US law requires this notice, so use it to compare with the figures on this page.