Why APR matters more than most people realize
When comparing credit cards, it's easy to focus on rewards, sign-up bonuses, or annual fees and treat the APR as an afterthought — especially if you plan to pay your balance off quickly. But for anyone carrying a balance for more than a month or two, APR is usually the single biggest factor in how much a card actually costs. A few percentage points of difference compounds fast, since interest is recalculated on your balance every single month.
This calculator isolates that one variable. Using the exact same balance and the exact same monthly payment, it runs the full payoff simulation twice — once at each APR — so you can see, in dollars and months, exactly what the rate difference costs or saves.
How the comparison works
Both scenarios use identical inputs except for the APR. Each is simulated independently using the standard month-by-month amortization model: interest accrues on the remaining balance, your payment covers that interest first, and the rest reduces principal, repeated until the balance reaches zero.
A worked example
On a $5,000 balance paid at $200/month, a card at 24.99% APR costs about $1,460 in total interest and takes roughly 32 months to pay off. The same balance and payment at a 15.99% APR costs only about $840 in interest and pays off in around 29 months — a savings of roughly $620 and 3 months, purely from a 9-point difference in rate.
Using this comparison effectively
- Compare your current card's APR against any pre-approval offers you receive — the savings from switching are often larger than they first appear.
- If the rate difference includes a promotional period and a transfer fee, use the Balance Transfer Calculator instead for a complete cost comparison.
- A strong payment history can sometimes earn you a lower ongoing APR just by calling your card issuer — it costs nothing to ask, and this calculator shows exactly what a successful request would be worth.