Credit card payoff calculator: set a pay off goal for your credit card debt
Revolving credit card debt can make it difficult to meet a payoff goal and having a calculator can help you analyze your debt obligations quickly. By investigating current debts, along with additional charges, and future major purchases you can figure out what it will take to pay off your credit card to meet any pay off goal- something that may be helpful for improving your credit score and planning your financial future. Lets begin by discussing what this calculator may be used for, and then review how you may actually use it.
Set any goal to become debt free and meet it
By setting a payoff goal and including information about your credit card debt you can work out the monthly obligation needed to meet your goal. Further, you can assess your current spending approach and analyze the interest and principle payments being made. This will allow you to evaluate how any payment increases can help you reduce the interest, and save money and time to become debt free.
Using the credit card payoff calculator
The credit card payoff calculator is very straightforward to use and only requires knowledge about your current financial situation. By including your card balance, interest rate, and having some basic understanding of upcoming charges or future purchases, you can begin to formulate the right strategy to become debt free. The best part is that you can set a payoff goal and adjust it to fit your means.
When this information is added to the credit card payoff calculator you will receive integrated graphs and reports about your payments and financial situation as well as what it will take to reach your payoff goal.
Pay off debt and improve your credit score faster
While many factors account for your credit score, your credit card use can account for up to 30% of the score you receive. Your credit card use is defined by how much debt you have compared to how much credit is available to you, and is ideally kept at only 10% debt to credit.
To raise your credit score you must either increase your credit limit, or reduce your debt to credit ratio. If you have large balances on your credit cards it will make the first option very difficult, only leaving you with the latter- paying off your debt.
How to use the credit card payoff calculator
The credit card payoff calculator is composed of two parts: and information intake and an integrated results section. Within the information intake is two subsections: your credit card information and planned major purchases. Once you have reviewed your banking statements (either online or paper) and can say with certainty your credit balance, you may begin using the calculator.
Your credit card information
1. On the first line of the calculator add your current credit card balance, using the up or down arrows to make this even easier.
2. You should add your interest rate or annual percentage rate for the credit card on the second line of the calculator.
3. Next, set a payoff goal in months on the third line of the calculator. This is the number of months that you would like the card totally paid off.
4. On the fourth line of the calculator identify your current monthly payment.
5. Then, you should add any planned additional monthly charges such as balance protection or any regular monthly purchases on line five, while including any annual fees for credit card use on line six.
Planned major purchases
In this subsection you may include up to two major purchases to factor into your credit card pay off.
1. On line one of this subsection identify in dollars one major purchase you are planning to make, that is separate from your panned additional monthly charges.
2. Then, on line two distinguish how many months from now the purchase will be made.
3. If you think you will be making any other major purchases add it to the third line of the subsection, along with the months from now that the purchase will be made on the fourth line.
Once this information is added to the calculator you will receive various integrated reports to help assist in your understanding of reaching your pay off goal.
Your credit card payoff results
Your credit card payoff results are split into information prompts and integrated reports below the information inputs.
Immediately below the information input your will be given a prompt of what your monthly obligation must be to meet your pay off goal. If this is not within your means be sure to view the total payments tab to view other payment options to reach your payoff goal
Then, you can scroll through three results reports in the tabs below to view your principle balance, total payments, and payment schedule with your current monthly payment.
The principle balance graph outlines how your current monthly payment will affect the principle balance on the credit card in blue, compared to the suggested monthly payment in green. The suggested monthly payment is formulated to reach your payoff goal and thus will be reflected on the graph. If your current monthly payment does not exceed your additional monthly charges and annual fees, you may see the principle balance rising instead of declining as with this example. If your graph looks like this, continuing your current monthly payment can result in maxed cards and damaged credit.
The total payments bar graph outlines the required monthly payments for different payoff goals relative to your card balance. Here you may see what your monthly payment obligation would be if you wanted to pay off your credit card in 12 months, 24 months, 36 months, 48 months, or 60 months.
Finally, you may view a detailed summary of the payment schedule with your current payment. This table allows you to view the breakdown of your principle and interest payments based on your current monthly payment, in relation to the ending principle balance on the credit card. As the goal of this calculator is to create an effective payoff strategy, the ending principle balance should be getting smaller each month.
Now that you know what it will take to reach your payoff goal, you can take the right steps to reduce your balance, improve your credit score, and work on your savings plan to guarantee your financial future. Please remember to rate your experience with the credit card payoff calculator, and sign up to receive exclusive member benefits.