This tool helps you calculate the interest you will pay on your UK credit card balance based on your payment plan.
Credit Card Interest Calculator
This calculator helps you understand the cost of carrying credit card debt in the UK over time and calculates how many months you will take to pay off the debt based on the provided minimum monthly payment.
How It Works:
- Principal Amount (£): The initial amount of debt
- APR (%): The annual percentage rate, which is the interest rate for the year
- Minimum Monthly Payment (£): The least amount you commit to paying every month
- Balance Transfer Fee (%): The fee charged if you transfer the balance from one card to another
How to Use:
- Enter the Principal Amount in pounds sterling.
- Enter the Annual Percentage Rate as a percentage.
- Enter the Minimum Monthly Payment in pounds sterling.
- Enter the Balance Transfer Fee as a percentage (if applicable).
- Click the “Calculate” button to see the results.
Results Explained:
- Principal Amount (£): The initial debt amount you entered
- APR (%): The annual percentage rate you entered
- Minimum Monthly Payment (£): The minimum amount you need to pay each month
- Balance Transfer Fee (£): The fee for balance transfer calculated based on the Principal Amount
- Total Interest Paid (£): The total amount of interest you will pay over the life of the debt
- Total Amount Paid (£): The sum of the Principal Amount plus Total Interest Paid
- Months to Pay Off Debt: The total number of months it will take to pay off the debt
Limitations:
Please note that this calculator makes several simplifying assumptions about the timing of payments and interest charges. Results should be seen as approximations and are intended to aid with financial planning rather than serve as precise predictions.
Use Cases for This Calculator
Calculate Overall Credit Card Interest
You can determine the total interest you’ll pay on your credit card balance over a specific period. By inputting your current balance, interest rate, and payment timeline, you can see how costs can accumulate and plan your repayments effectively.
Compare Credit Card Offers
If you’re considering different credit cards, use the calculator to compare the projected interest accrued on each one. Enter the interest rates and potential balances for each card, and see which option minimizes your costs over time, helping you make a more informed decision.
Plan Your Monthly Payments
Calculate how much you need to pay each month to clear your credit card debt by a set date. Input your balance and desired payoff timeline, and the calculator will show you the required monthly payment, allowing you to budget accordingly.
Understand the Impact of Minimum Payments
It’s crucial to understand how making only minimum payments affects your credit card debt. Input your balance and the required minimum payment percentage to discover how long it will take to pay off the debt and how much interest will accumulate throughout the process.
Calculate Interest Savings with Extra Payments
If you want to pay down your credit card faster, see how additional payments can save you on interest. By entering your current balance and the amount you plan to add to your monthly payment, you’ll discover how quickly you can reduce your debt and the overall interest saved.
Estimate Interest Rates on New Purchases
Plan for future purchases by estimating the interest you’d incur. Enter the purchase amount and your card’s interest rate to see how much interest you’ll pay if you don’t pay off the total by the due date, helping you avoid costly long-term charges.
Assess the Effects of Balance Transfers
Finding a better deal through a balance transfer? Input your existing balance, the interest rate of your current card, and the rate of the new card to see how much you’ll save in interest, helping you decide if the transfer is worth it.
Check Loan vs. Credit Card Interest Rates
Consider the differences between credit card interest and personal loan rates. Enter the amount you plan to borrow via a credit card versus a personal loan to compare how much interest you would ultimately pay, ensuring you’re making the most cost-effective choice.
Evaluate Long-Term Financial Strategies
Use the calculator to project how different spending and repayment strategies can impact your financial future. Input various potential balance increases and payment strategies to visualize how your credit card habits can affect your overall financial health.
Understand Reward Card Interest Implications
If you have a rewards credit card, knowing how interest affects your rewards is crucial. Input your expected spend, reward rate, and interest rate to evaluate whether your rewards outweigh the interest incurred, helping you optimize your spending habits.