Credit Card Payoff Calculator 2026/27
A £3,000 credit card at 22.9% APR paid at £150 per month clears in about 24 months with £680 interest. Paying only the 2% minimum takes over 25 years and costs more than £3,000 in interest alone. Use this calculator to see the true cost and plan your payoff.
Figures verified against Bank of England base rate on .
Written by James HartleyCIMA
Calculator
Find this on your credit card statement or agreement. Average UK card APR is ~22 to 25%.
The amount you plan to pay each month. Must be above the interest charge.
Used to calculate the minimum-payment comparison. Usually 1 to 3% on UK cards.
Paid Off In (Fixed Payment)
2y 2m
Paying £150.00/month
Total Interest (Fixed)
£815
Total Paid (Fixed)
£3,815
Minimum Payment Time
69y 7m
Interest Saved vs Minimum
£27,666
Your APR is above 20%. A 0% balance transfer card (typically 12 to 30 months) could save you hundreds in interest. Pay a small transfer fee (usually 2 to 3%) but pay no interest during the offer period.
These insights are generated based on your inputs and general UK financial guidelines. They do not constitute personal financial advice. Always consult a CIMA-qualified accountant or FCA-regulated adviser before making financial decisions.
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How Credit Card Payoff Calculator 2026/27 Works
How credit card interest is calculated
Credit card interest is charged daily based on your APR (Annual Percentage Rate). The monthly interest charge = balance × APR ÷ 12. On a £3,000 balance at 22.9% APR, that's approximately £57.25 per month in interest alone.
Why minimum payments are a debt trap
Minimum payments are typically 1 to 3% of the balance. Because the balance falls so slowly, the interest compounds for years (sometimes decades). By the time you've paid off the debt, you may have paid the original balance twice or three times over in total interest.
Balance transfer strategy
A 0% balance transfer card can halt interest while you repay the principal. Typical offers: 12 to 28 months at 0% with a 2 to 3% transfer fee. This can save hundreds in interest, but you must clear the balance before the 0% period ends.
Frequently Asked Questions
The average UK credit card APR is around 22 to 25% as of 2025. Balance transfer cards can offer 0% for 12 to 28 months (with a 2 to 3% fee). Purchase cards often offer 0% for 3 to 12 months. Store cards can charge 30 to 60% APR.
Minimum payments barely cover the interest charged each month. The balance falls very slowly. On a £3,000 balance at 22.9% with 2% minimum payments, total interest exceeds the original balance.
Pay as much as possible each month, ideally the full balance. If you have multiple cards, use the avalanche method (highest APR first). Consider a 0% balance transfer to halt interest while paying down the principal.
Yes. Utilisation ratio (balance ÷ limit) is a key credit score factor. Keeping it below 30% improves your score. Paying down balances reduces utilisation and improves your score within 1 to 2 billing cycles.
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Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.