Credit Card Calculator
See the real cost of revolving credit and how to get out of debt
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Total current bill/debt amount
Average: 15-25% per month (varies by country)
Usually 10-20% of the bill
Not recommended - makes paying off harder
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The Credit Card Trap
Revolving credit has the HIGHEST INTEREST RATES in the financial system (10-25% per month, 200-400% per year). It's a trap that keeps millions in debt for years.
Why is it a trap?
- •Minimum payment seems comfortable (only 15% of debt)
- •But 85-95% of the payment goes to interest, not principal
- •Debt barely decreases
- •Can take 10+ years to pay off, paying 5-10x the original amount
The Minimum Payment Myth
Example: $5,000 debt at 12% per month
Paying only the minimum (15%)
- 12+ years to pay off
- $47,000 total (almost 10x!)
- $42,000 in interest
Paying $500 fixed per month
- 14 months to pay off
- $7,000 total
- $2,000 in interest
Difference: $40,000 saved!
How to Use the Calculator
- 1
Enter how much you currently owe on the card
- 2
Enter the interest rate (check your statement for 'revolving charges')
- 3
Choose your strategy - never pay just the minimum!
- 4
DON'T check 'continue using card' - this perpetuates debt
- 5
Consider personal loan if rate is lower than revolving
- 6
Use the 'What if I pay more?' simulator to explore options
Strategies to Get Out of Debt
STOP Using the Card
Freeze, hide, cut it. Use only debit or cash. Essential to get out of the hole.
Always Pay MORE than Minimum
Minimum is a trap. Every extra $100 saves hundreds in interest.
Consider Transferring the Debt
Personal loan: 2-5% month. Much lower than revolving credit.
Negotiate with the Bank
Call and ask to renegotiate. Banks prefer to receive in installments than lose everything.
Snowball Method
If you have multiple debts, pay off the smallest first for motivation.
Avalanche Method
Prioritize highest interest debt first. Saves more money overall.
Signs You're at Risk
If you have 3+ of these signs: seek help (consumer protection, financial counseling).
Frequently Asked Questions
What is revolving credit?
It's when you don't pay the full bill and the balance rolls to next month with very high interest (10-25% month). It's the worst form of credit.
Why are credit card rates so high?
It's unsecured credit with high default risk, so banks charge absurd rates. It's the banks' most profitable product.
Should I pay only the minimum?
NEVER! Minimum payment is a trap. You'll pay 5-10x the amount and take years to pay off. Always pay the maximum possible.
Is it worth installment paying the bill?
Installments usually have lower interest than revolving (2-5% month vs 10-15%). If you can't pay in full, installment. But it's still expensive.
How to get out of revolving credit?
(1) Stop using card, (2) Pay more than minimum, (3) Consider personal loan to pay off, (4) Negotiate with bank.
Can I negotiate the interest rate?
Yes! Call the bank, ask for reduction or renegotiation. Good payers can get better rates.
Is a loan to pay off the card worth it?
Almost always yes! Personal loan (2-5% month) is much lower than revolving (10-25%). Saves thousands. But stop using the card after!
What if I can't pay?
Negotiate before defaulting. Banks prefer installments. Default makes everything worse (higher interest, bad credit).
How long does bad credit last?
30+ day delay goes to collections. Stays up to 7 years after payment. Hurts future credit.
How to use a card without falling into revolving?
(1) Only spend what you have, (2) Always pay full bill, (3) Use low limit, (4) Set up spending alerts.
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