How credit card interest works
TODO: replace with reviewed copy. Credit cards and most consumer loans charge interest on whatever balance you're still carrying at the end of each billing cycle. The rate is usually quoted as an APR — an annual figure — but it's actually applied monthly, so a big chunk of every minimum payment goes to interest before anything reduces what you actually owe. The longer a balance sits, the more of your payment interest eats.
How to use this calculator
TODO: replace with reviewed copy. Enter your balance, interest rate, and either a monthly payment or a target payoff date, in whatever currency you're budgeting in. The results update as you type — no need to click anything. Use the "what if" slider to see how a bit of extra each month changes your payoff date, then expand the amortization schedule if you want the full month-by-month breakdown.
Snowball vs. avalanche: which order should you pay off debts?
TODO: replace with reviewed copy. If you're trying to organize multiple debts, not just one, two common strategies are the avalanche method (pay off the highest interest rate first, which minimizes total interest) and the snowball method (pay off the smallest balance first, which builds momentum with quick wins). We'll cover both in detail, with a calculator for multiple debts at once, on the page below.
Frequently asked questions
- Is this calculator free to use?
- TODO: replace with reviewed copy. Yes — this calculator is free, with no sign-up required.
- What's the difference between nominal and effective interest rate?
- TODO: replace with reviewed copy. A nominal rate is simply divided by 12 to get a monthly rate. An effective annual rate already accounts for monthly compounding, so converting it to a monthly rate involves a twelfth root instead of a straight division — the two can produce slightly different payoff timelines for the same quoted percentage.
- Can I use this calculator in a currency other than CAD?
- TODO: replace with reviewed copy. Yes — use the currency selector in the calculator to switch to any currency; every number on the page updates to match.
- Does this calculator store my financial information?
- TODO: replace with reviewed copy. No — all calculations run in your browser. Nothing you enter is sent to a server. The only thing saved locally on your device is your preferred currency, so it's remembered next time.