The Credit Card Roll-down Calculator applies two simple principles to paying off your credit card debt.
- Payoff your highest interest rate first.
- When a card balance is paid in full, apply its monthly payment to the card with the next highest interest rate.
To see how this can be applied to your credit card debt, enter your credit card balances and an additional Roll-down amount. The calculator will then apply your additional monthly payment to the credit card with the highest rate. When that credit card is paid in full, the card with the next highest rate will be paid down. This continues until you have rolled through all of your credit cards and your debt is paid in full. Click the "View Report" button for a detailed look at the results.
- Payoff highest rate first
- Leave this box checked to have the calculator payoff your credit card with the highest rate first. You can uncheck this box to see the results of an alternate payment method. The alternate method pays off your credit cards starting with the lowest balance.
- Credit cards
- Enter up to 10 credit card accounts, one on each line.
- Your current balance on your credit card.
- Interest rate
- The annual percentage rate you pay on a credit card. The rate you enter is used to calculate the interest on all future payments for the credit card. The length of time to pay off this credit card may be much greater than calculated, if you enter a low promotional interest rate that is only good for a short period of time.
- This is your initial monthly payment. If you check the "use credit card minimum payments" box, your monthly payment is calculated as 4% of your current outstanding balance. With the "use credit card minimum payments" box checked, your monthly payment will decrease as your balance is paid down. This can greatly increase the length of time it takes to pay off your credit cards. Uncheck this box to enter your own monthly payment that will remain the same until your balance is paid in full.
(We calculate your minimum monthly payment as 4% of your current outstanding balance. While your actual minimum monthly payment may be slightly different, this is one of the most common methods used by credit card companies to calculate minimum payments.)
- Additional payment
- This dollar amount is in addition to your monthly minimum payments that you will use to pay down your credit card debt. The higher this amount, the faster your debt will be paid off. It is important that your additional payment is one that you can afford. For the Roll-down method to be effective you must be consistent in your payments. Should you choose an amount that is too high, you may become discouraged if you are unable to meet your payment goal.