Take control of your credit card debt by working out a payment plan with this simple credit card repayment calculator.
It’s easy for credit card debt to creep up on you, which is why it’s important to keep an eye on it. This credit card calculator will help you plan to pay off your debt within a set time frame. Take control of your financial future with Savvy’s handy credit card interest calculator.
It’s quite simple to use the credit card calculator: just enter in your annual card fee, the annual interest rate and the balance outstanding on your card.
Next, enter the minimum percentage repayment required, or alternatively the minimum dollar repayment, as well as your initial repayment, and click anywhere on the credit card payment calculator to see the results.
If you’d like to see how to pay off your card more quickly, enter a higher repayment amount in the ‘choose higher repayment’ box and the credit card payment calculator will compare the length of time it’ll take to pay off your card at both the original repayment rate, and the higher rate.
You’ll also be able to see the total interest paid for the original repayment and also the higher repayment schedule.
A credit card is a way to borrow money from a lender (up to a set dollar limit) with what’s called a revolving line of credit. This means you can continuously borrow up to your limit and use your credit card to pay for purchases online, over the phone and in person.
Credit cards have set interest rates which you pay on any balance outstanding after the initial interest-free period (which ranges from 30 to 55+ days). They usually come with an annual fee and you’re required to make a minimum monthly payment on your credit card if you are unable to pay off the debt on your card in full.
Some credit cards also offer rewards points for every dollar spent. These credit cards are known as rewards cards and the points accrued can be used to buy select goods and services from a catalogue or redeemed to pay for flights and other travel.
There are many different types of credit card available on the Australian market today, including:
The type of credit card that’s most suitable for you depends on how you intend to use it. If you plan to pay off the balance of your card each month, you may be interested in cards that offer travel points and rewards, rather than a low interest rate. On the other hand, if you have a large credit card debt, utilising a balance transfer card with a 0% interest rate for a set period may make the most sense. Choose a card that fits in with your lifestyle and the way you intend to use your card.
Be aware the credit limit on your credit card counts towards your overall debt, even if you pay your card off at the end of each month. Therefore, it makes sense to have as low a credit limit as possible on your credit card, particularly if you are intending to apply for a home loan or a car loan in the near future. Lowering your credit card limits can improve your credit score.
Gaining rewards points each time you use your credit card may sound appealing, but it’s important to be aware of rewards schemes that simply aren’t worth the effort. This may be due to:
In September 2021, Australians owed over $35.2 billion on credit and charge cards, according to the Reserve Bank of Australia. Over $18.9 billion of this debt was accruing interest, which is going straight into the pocket of the credit card companies. If you’re going to use a credit card, make sure you pay the balance off in full each month so you’re not hit with expensive interest charges on your card.