The math behind extra payments
Every dollar you pay above your card's interest charge for the month goes directly toward reducing your principal. And because interest is recalculated on your balance every month, a smaller principal means a smaller interest charge next month too — which means even more of next month's payment goes toward principal. This snowballing effect is why extra payments have an outsized impact on both your payoff time and your total interest paid.
This calculator compares two scenarios side by side: what happens if you keep paying your current amount, versus what happens if you add a fixed extra amount every month. The difference between the two — in both time and total interest — is exactly what that extra payment is worth to you.
A worked example
Say you have a $5,000 balance at 24.99% APR, currently paying $150 per month. At that pace, it takes about 47 months (nearly 4 years) to pay off, and you'll pay roughly $2,010 in total interest.
Now bump that payment up by an extra $150, to $300 per month — the exact example from the classic "what if I pay $300 instead of $150" question. Your payoff time drops to about 19 months, a savings of roughly 28 months (over two years), and your total interest falls to around $704 — a savings of more than $1,300 in interest, just from doubling your monthly payment.
Where to find extra money for payments
- Redirect any windfalls — tax refunds, bonuses, cash gifts — directly at your highest-APR balance rather than spending them.
- Round up your payment to the next $50 or $100 increment; the psychological cost is minimal but the compounding benefit adds up.
- If you have several cards, check the Debt Avalanche Calculator to see which card an extra payment should target first for maximum interest savings.
- Once you've found an extra amount you can commit to, use the Credit Card Payoff Calculator to lock in the full new payoff schedule.