# Scare Yourself Into Paying Off Your Credit Cards With This Tool

If you’re accustomed to paying just the minimum payment on your credit card bills each month, you might change your ways if you discover how long it will take you to get rid of your debt.

ReadyForZero created a calculator that can shock you into doing everything you can to pay down your balance. Using an annual percentage rate of 15 percent, the tool calculates the total cost of your debt, as well as how long it will take you to pay off the cards.

For instance, if your balance is \$2,000, you’ll pay \$1,946 by the time you’ve zeroed out your balance — 14 years, 6 months and one day from now.

Compound interest can hang around your neck like an anvil. You can speed things along and reduce your interest burden by paying off just a little bit extra each month.

The High Cost of Credit Card Debt [ReadyForZero]

1. AustinTXProgrammer says:

Isn’t this the reason they have to put this on the statements now?

Doesn’t your credit card statement have this information now anyway?

“For instance, if your balance is \$2,000, you’ll pay \$1,946 by the time you’ve zeroed out your balance ‚Äî 14 years, 6 months and one day from now.”

This doesn’t make a lot of sense. So you would pay less than your current balance? Or is the \$1,946 on top of the \$2,000 balance?

• ChaosOnion says:

\$1,946 in interest alone, so that on top of the \$2000.

• INDBRD says:

I thought the same thing, although I knew what the point was… woo hoo I can pay the minimum payment and save \$54 dollars!

• smo0 says:

Depressing, these people are paid for this job and I’m a struggling writer who works minimum wage who can shit out better articles.

THANKS FOR USING MY TIPS AND SUBMISSIONS GUYS!!!!

Not!

• jiubreyn says:

Insulting other’s is a great way to get a job/reference. Keep it up! (Not).

• jiubreyn says:

Perhaps instead of insulting the writers on this site you could be asking them for advice — how they landed their job. If you feel that you can do better, then do it.

• magnetic says:

Sounds like a bargain!

4. a354174 says:

I feel like it’s broken.

Instead of credit card I put in my home loan. \$262,500 is all I owe on it now. It calculates at 15% APR I would only pay ~\$350,000 in interest over 52 years

Yet when I had a mortgage on \$140,000 at 6% I would have paid \$280k in interest over 30 years.

Something seems off here.

I don’t think the interest on credit cards is calculated the same way as mortgage interest.

• TuxthePenguin says:

You are correct.

• hansolo247 says:

It is and it isn’t.

Both take interest applied to the previous balance…on a mortgage that’s built into the amortization schedule.

Credit cards do things like continuous compounding and using an Average Daily balance. It’s similar, but not the same.

• crispyduck13 says:

Do you know what APR means? Go Google it and get back to us on your initial question there. Also, look up “amortization schedule.”

• AustinTXProgrammer says:

APR takes into account compounding, and in the case of a mortgage loan they have to factor in closing costs. If anything that exasperates the difference. Now on the other hand I don’t have the time to do the actual math right now. Back to work.

• Cosmo_Kramer says:

You would not pay that much interest on a \$140k loan. You’d only pay \$162k in interest:
http://www.amortization-calc.com/#loan-140000-30-6-3-2012-2

I’m not sure if the calculation for the credit card is correct, but assuming it is the reason the interest is comparatively low is that the minimum payment on a credit card with that balance would start out extremely high, so you’d pay down more of the balance early in the loan (compared to a mortgage where the initial payments are mostly interest). If you had a 15% 30 year mortgage for \$262,500 you’d pay over \$900k in interest.

5. eezy-peezy says:

Sounds like a deal to me

For instance, if your balance is \$2,000, you’ll pay \$1,946 by the time you’ve zeroed out your balance ‚Äî 14 years, 6 months and one day from now.

I owe \$2K but pay \$1946 — or did you possibly mean to say

For instance, if your balance is \$2,000, you’ll pay \$1,946 extra in interest by the time you’ve zeroed out your balance ‚Äî 14 years, 6 months and one day from now.

• ClemsonEE says:

Seemed openly implied that the \$1946 was the extra interest you owed.

• MaxH42 thinks RecordStoreToughGuy got a raw deal says:

No, it seems obvious, but it was not implied at all; barb’s barbs were well-deserved.

• SabreDC says:

Actually, it is implied. The article says that the balance is \$2,000 and that the other money is what you’d pay “by the time you’ve zeroed out your balance”, implying that you’re still paying down the balance apart from paying the \$1,946.

• MaxH42 thinks RecordStoreToughGuy got a raw deal says:

“[B]y the time you’ve zeroed out your balance” means when your debt is paid off. So when your debt is paid off, you’ll have paid \$1,946 according to the OP. The words “interest” and “in addition to” are not in that sentence. Sorry, it’s either faulty proofreading or faulty math.

6. crispyduck13 says:

You are both correct. I am in the bad position of having 3 seperate CC bills coming in every month, each from a different company. All of them have this little chart that tells you how long it will take to pay off the balance with the minimum payment and the total you would pay over the life of the debt. Then they also put how much per month you’d have to pay to pay it off in 3 years, plus the total over the 3 years. Then it shows how much you would save (subtract A from B).

I really like it actually. It’s helpful because you don’t always know how to calculate the interest and form a plan. This gives you a good baseline to take control of the debt. First useful thing on my credit card bills besides the balance!

• Buckus says:

You can thank Congress for that little tidbit on your statement. Trust me, left to their own devices, CC companies wouldn’t even show you how much interest you paid last month, let alone how to save money by paying off the CC earlier.

7. longfeltwant says:

I went to the website

and it told me to put in my credit card debt. I put in zero, and the webpage just flashed, like that was an error. I’m unimpressed with their software.

• The Porkchop Express says:

I tried to type in “first born” it did not compute this either! I mean really, it should work based on what we owe right?

Anyone try “arm & leg”

• Sian says:

It won’t seem to accept ‘My Immortal Soul’ as input either. damn. How the hell am I supposed to pay that off?

• Princess Beech loves a warm cup of treason every morning says:

I don’t know. Maybe God has a similar website? :

• There's room to move as a fry cook says:

Type in \$1 and view the response

I wasn’t impressed with the manually scrolling that didn’t align the next colored sections properly on the screen.

8. Real Cheese Flavor says:

If you can’t afford to pay off the balance at the due date (as if it were a charge card like American Express), then you can’t afford whatever it is you’re putting on the card in the first place.

• DrPizza says:

Some people carry a zero balance and have a credit card that they reserve for emergencies. Suppose a close (brother/sister/parent) died 1000 miles away. You have to quickly arrange for round-trip airfare, hotel, etc. You could accumulate 1000’s of dollars in costs within just a few days. If you don’t have that kind of liquidity – perhaps you’ve been socking away as much as possible into your 401k – then perhaps it will take you a couple of months to pay that off. Does that mean you can’t afford it? I think not.

9. cyberpenguin says:

Ben did a story on a little app I wrote for Android a year and a half ago called Credit Cost…

http://consumerist.com/2010/11/paying-with-credit-app-shows-you-the-true-cost-per-purchase.html

My intent wasn’t to show how long it will take to pay off balances, but how long a particular purchase will ride inside a running balance if all you ever do is make the minimum payment…. which is quite a bit longer than your credit card statement will show.

10. do-it-myself says:

It’s knowledge like this that makes me feel good about myself. Aside from helping my parents out with some of my own expenses during college (which has been paid off for years), only 3 times in my life have I put something on a credit card that I did not pay in full at the end of the month. Once was between the end of undergrad and the start of grad school, once while I was looking for a job after my post grad school internship was over (I had enough in my savings, but I wanted to keep cash on hand just in case), and now, due to paying everything off after starting my new job….I was a victim of a hit-and-run on the highway and the repair was below my insurance deductible (thankfully!)….so now I have about \$300 to pay off over the next 2 months as I’m trying to rebuld my savings.

I really don’t understand how people get in \$20,000 or MORE CC debt.

Is it really that hard of a concept NOT to buy things you CAN’T afford? I feel like my life is as lavish as can be and I’m not breaking the break with what little I feel I get paid!

11. StatusfriedCrustomer says:

Isn’t \$1946 spread out over the next 14 years much less significant than \$2000 due today? The report implies that the current balance and the interest are apples-to-apples, but I think that due to inflation, it will be easier to pay the interest than it is to pay the current balance.

For example, consider one minimum payment of \$20. That’ll be like the price of an ice cream cone in the year 2025.