Debt Payoff Example
Credit Card Payoff — $8,000 Balance at 22% APR
How to pay off an $8,000 credit card balance and how much the interest costs.
Scenario
$8,000 credit card at 22% APR. Minimum payment: ~$200.
Inputs
Balance$8,000
APR22%
Min. Payment$200
Results
Min payment only74 months / $6,890 interest
$300/month37 months / $3,043 interest
$500/month20 months / $1,577 interest
Explanation
At 22% APR, carrying an $8k credit card balance costs $6,890 in interest over 6 years if paying minimums. Paying $300/month cuts interest by 56%. Credit cards with 20–30% APR are financial emergencies that deserve immediate attention.
Key Takeaways
- Balance transfer cards with 0% intro APR (12–21 months) can eliminate interest.
- Never carry a credit card balance if you have savings earning 4–5%.