We have created this calculator to make it easier for people to analyze how their credit card balance is being repaid. As you already know, the interest rates on credit cards can be pretty high. For that reason, it’s important to pay off your credit card balance as soon as possible. You can see how long you have to repay the balance with our credit card calculator.
After setting a particular monthly payment, you’ll be able to calculate your monthly payment for the expected payoff date or desired payback term. This will allow you to easily calculate your interest payments. That can help create a payment schedule and pick the most suitable credit card.
But it’s not all about the credit card calculator. In addition to learning how to use this tool, you will also find out more about credit card debt and the different kinds of credit cards available. Ultimately, this should help you determine which credit card best works for you and offers the most benefits.
Credit Card Definition: What Are Credit Cards and How to Choose One?
A credit card is a small plastic card that is used to purchase goods and services. In other words, it’s a type of card that can be used instead of cash to purchase products and/or services. They are issued by banks or other financial institutions, and can usually be used in any country. The first bank to offer them for general use was Barclays Bank in 1967, and BankAmericard became the first credit card accepted nationwide.
These cards can be used at any store that accepts them. They typically have an expiration date, which means that if you don’t use your credit card before this date, then it will be invalid. The cardholder can either pay the full price of the item with the credit card, or they may pay a deposit and then make payments until they have paid off the balance.
Think of it as a revolving loan. It is also important to point out that each credit card has a specific credit limit. Another important characteristic of credit cards is that they have a min monthly payment which is defined by their issuers. Remember that credit cards don’t come with a specified term.
When choosing a credit card, you should consider the following things:
- Interest rate
- Annual Percentage Rate
- Minimum payment
- Card fees
- The grace period, and
- Rewards
Credit Card Types to Consider
Since 1950, when credit cards have been introduced, they’ve become present everywhere all around the globe. As a result of numerous improvements in the financial sector, a wide variety of credit cards have been designed to cater to different customer needs. Here are some of the most popular types of credit cards in the United States:
- Reward credit cards
- Business credit cards
- Student credit cards
- Travel credit cards
- Secured credit cards
- Unsecured credit cards
- Charge cards
- Cash-back credit cards
- Subprime credit cards
Let’s check some of these cards and see their key features.
Reward credit cards
Credit cards are a convenient way to spend money and get rewards. Reward credit cards offer extra benefits and rewards on top of the standard ones. However, they often come with an annual fee that can add up.
Rewards credit card providers often have different types of reward programs for their customers. Some offer points for every dollar spent, while others may offer cash back or miles for purchases made on certain airlines or hotels. Rewards credit cards can also be linked to other accounts like frequent flyer programs or loyalty rewards programs to earn more points or miles when you use them.
Business credit cards
Business credit cards are a great way to establish your company as a serious player in the industry. They provide you with more flexibility in terms of the type of card you can get and what rewards you can earn.
Whether you are looking for a card that offers cash back, no annual fee, or one that has no foreign transaction fees, there is likely an option for you. There are also many different cards that offer special benefits for business owners: travel rewards, employee discounts, and more.
Student credit cards
Student credit cards are a type of credit card that is intended for people who are still in school. These cards have some benefits such as a low APR, no annual fee, and no foreign transaction fees.
There are many reasons why you might want to get a student credit card. You might be in need of emergency funds or you might need to make some big purchases. If you’re looking for a way to manage your spending or if you want to build your credit, then getting a student card can be good for you.
Secured & Unsecured credit cards
Credit card fraud is on the rise and people are starting to lose trust in credit card companies. Secured credit cards offer a solution to this issue. These cards are not as popular as regular credit cards but they are growing in popularity because they offer some peace of mind when it comes to fraud and identity theft.
The most common form of secured credit card is a prepaid card that requires you to deposit money into an account before you can use it. You can also get an unsecured secured card which does not require that you make any deposits before using it but these types of cards come with higher fees.
Cash-back credit cards
Cash back credit cards are a popular financial product that offers cash back rewards for every purchase. These rewards can range from 1% to 5% of the purchase price. It is usually paid out in the form of a statement credit or check, although some cards offer other options, such as gift cards or travel vouchers.
The popularity of these cards comes from their ability to provide consumers with extra monetary value. They have become increasingly popular as people have been more conscious about their spending habits and want to save money on everyday purchases.
How to Calculate Credit Card Monthly Payment
P = Rate * CCB / (1 – (1 + Rate)^(-Time))
Example:
Credit Card Balance: $50,000
Interest Rate (annual): 5.00%
Time to repay (years): 4
In this example, the credit card monthly payment would be 14,100.59. While you can calculate it yourself using the formula mentioned above, we recommend that you employ the credit card calculator. Give it a try!