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Credit Card Payoff Calculator
How long a balance takes to clear at your monthly payment, and what the interest really costs.
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Result
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Card interest is quoted per month because the annual figure is alarming. At 3.5% a month the effective annual rate is above 51%.
Why the minimum payment never works
The minimum is usually 5% of the balance. At that level most of the payment covers interest and the balance barely moves — a ₹1 lakh balance can take over a decade to clear and cost more in interest than the original spending.
The interest-free period disappears
Carry any balance and the grace period ends. Interest then runs on new purchases from the transaction date, not from the statement date. Clearing the balance in full is what restores it.
Cheaper ways out
A personal loan at 12% to 16% costs a third of card interest. Converting the balance to EMI with the issuer sits in between and is quicker to arrange. Either is better than revolving.
Frequently asked questions
What is the real interest rate on a credit card?
Cards quote a monthly rate. At 3.5% a month the effective annual rate is above 51%, because the interest compounds. That compounding is why a balance that looks small grows quickly when carried.
Why does paying the minimum never clear the balance?
The minimum is typically 5% of the outstanding amount, and most of it goes to interest. A ₹1 lakh balance paid at the minimum can take over a decade to clear and cost more in interest than the original spending.
Do I lose the interest-free period if I carry a balance?
Yes. Once any balance is carried, interest runs on new purchases from the transaction date rather than from the statement date. Clearing the balance in full is what restores the grace period.
Is converting to EMI better than revolving?
Almost always. Issuer EMI conversion typically costs 13% to 18% a year against 40% or more on revolving credit. A personal loan is usually cheaper still if your score supports it.