The Annual Percentage Rate (APR) on your credit card is the yearly interest rate you'll pay on your outstanding balance. It's crucial to understand how APR works because it directly impacts the total cost of carrying a balance on your credit card. Unlike simple interest, APRs on credit cards can vary based on the type of transaction (purchases, balance transfers, cash advances) and can change over time.
This calculator helps you visualize the potential cost associated with different APRs on your credit card, factoring in common fees and payment structures.
Key Components of Credit Card APR:
Current Balance: The total amount you currently owe on your credit card.
Annual Fee: A yearly fee charged by some credit cards for the privilege of using them.
Purchase APR: The interest rate applied to new purchases made with your card. This is often the most commonly used APR.
Cash Advance APR: The interest rate applied to cash withdrawals made using your credit card. These rates are typically higher than purchase APRs, and interest usually accrues immediately.
Balance Transfer APR: The interest rate applied to balances transferred from other credit cards to this one. While introductory 0% APR offers are common, the rate can jump significantly after the promotional period.
Minimum Payment Percentage: The percentage of your outstanding balance that you must pay each billing cycle, often combined with a minimum flat fee.
Minimum Flat Payment: A fixed minimum amount due, regardless of your balance, ensuring a baseline payment.
How APR Affects Your Credit Card Debt:
Credit card companies typically calculate interest daily based on your average daily balance. This daily interest is then compounded, meaning you pay interest on the interest you've already accrued. This compounding effect can significantly increase the total amount you owe over time, especially if you only make minimum payments.
For example, if you have a balance of $1,500 and a Purchase APR of 18.24% (which is approximately 0.05% daily: 18.24% / 365), even a small daily charge can add up quickly. If you make only the minimum payment, a large portion of that payment goes towards interest, extending the time it takes to pay off your balance and increasing the total interest paid.
Calculating the Impact:
This calculator provides an estimate. The exact calculation for credit card interest can be complex due to daily compounding, grace periods, and varying APRs. However, by inputting your current balance, fees, and APRs, you can get a clearer picture of:
Estimated Annual Cost: An approximation of the interest and fees you might incur over a year.
Estimated Payoff Time: A projection of how long it might take to pay off your balance if you only make the minimum required payment.
Understanding these figures can motivate you to pay more than the minimum, pay off your balance in full each month, or consider strategies like balance transfers (while being mindful of the post-promotional APR).
function calculateAPR() {
var balance = parseFloat(document.getElementById("balance").value);
var annualFee = parseFloat(document.getElementById("annualFee").value);
var purchaseAPR = parseFloat(document.getElementById("purchaseAPR").value);
var cashAdvanceAPR = parseFloat(document.getElementById("cashAdvanceAPR").value);
var balanceTransferAPR = parseFloat(document.getElementById("balanceTransferAPR").value);
var minimumPaymentPercentage = parseFloat(document.getElementById("minimumPayment").value);
var flatFee = parseFloat(document.getElementById("flatFee").value);
var estimatedCost = 0;
var estimatedPayoffMonths = 0;
if (isNaN(balance) || balance < 0) {
document.getElementById("estimatedCost").innerText = "Please enter a valid balance.";
document.getElementById("estimatedPayoffTime").innerText = "";
return;
}
if (isNaN(purchaseAPR) || purchaseAPR < 0) {
document.getElementById("estimatedCost").innerText = "Please enter a valid Purchase APR.";
document.getElementById("estimatedPayoffTime").innerText = "";
return;
}
if (isNaN(minimumPaymentPercentage) || minimumPaymentPercentage < 0) {
document.getElementById("estimatedCost").innerText = "Please enter a valid Minimum Payment Percentage.";
document.getElementById("estimatedPayoffTime").innerText = "";
return;
}
if (isNaN(flatFee) || flatFee 0) {
while (currentBalanceForPayoff > 0 && months < 500) { // Limit to prevent infinite loops
var minimumPayment = Math.max(
(currentBalanceForPayoff * (minimumPaymentPercentage / 100)),
(flatFee || 0)
);
// Ensure minimum payment doesn't exceed the balance
minimumPayment = Math.min(minimumPayment, currentBalanceForPayoff);
var interestForMonth = currentBalanceForPayoff * monthlyPurchaseRate;
totalInterestPaid += interestForMonth;
currentBalanceForPayoff -= (minimumPayment – interestForMonth);
// Ensure balance doesn't go negative due to payment rounding
if (currentBalanceForPayoff 0) {
var years = Math.floor(estimatedPayoffMonths / 12);
var remainingMonths = estimatedPayoffMonths % 12;
var payoffTimeString = "";
if (years > 0) payoffTimeString += years + " year" + (years > 1 ? "s" : "");
if (remainingMonths > 0) payoffTimeString += (years > 0 ? " and " : "") + remainingMonths + " month" + (remainingMonths > 1 ? "s" : "");
resultTextPayoff = "Estimated Payoff Time (Minimum Payments): " + payoffTimeString;
} else if (balance === 0) {
resultTextPayoff = "Estimated Payoff Time (Minimum Payments): Paid off!";
}
else {
resultTextPayoff = "Estimated Payoff Time (Minimum Payments): Calculation could not be completed or balance is too high for practical payoff.";
}
document.getElementById("estimatedCost").innerText = resultTextCost;
document.getElementById("estimatedPayoffTime").innerText = resultTextPayoff;
}