How to use it
Type your card balance and your purchase APR, both from your latest statement. If your statement is from before the hike took effect, keep “Before the hike”. If it already shows the higher rate, choose “Already includes it”. If your cardholder agreement gives your rate as “Prime Rate plus” a number, choose Prime + margin and type that number.
The answer appears as you type: first the change in this month's interest, then what your balance costs each month now, then how long payoff takes at the minimum payment and at a fixed payment, before and after the change. The “What if” options let you try another move; they are scenarios, not forecasts.
How it's calculated
We use the same assumptions card issuers may use for the “Minimum Payment Warning” box on every statement (Regulation Z, Appendix M1): you make only the payment you chose, no new purchases or fees, the APR doesn't change during payoff, and every month is the same length. That makes the monthly rate your APR divided by 12.
- Interest each month = balance × APR ÷ 12, rounded to the cent.
- The hike in dollars = balance × 0.25% ÷ 12. On $6,000 that is $1.25 a month.
- Minimum payment follows the formula you pick, worked out from the month's opening balance. The last payment pays off the rest exactly.
- 3-year payment is the fixed payment that pays the balance off in 36 months, like the figure on your statement.
Example: the Fed's survey of card rates (August 2026 (preliminary)) puts the average APR for accounts charged interest at 22.36%. With the full 0.25 passed through, that becomes 22.61%. On a $6,000 balance, interest goes from $111.80 to $113.05 a month. At the interest + 1% minimum, payoff takes 227 months before and 228 months after; paying $250 a month takes 33 months either way. Every number is worked out in whole cents with exact fractions, so the results match our reference calculation to the cent. See the formulas, rules and worked examples.
What's not included
Promotional and 0% rates, balance-transfer rates, penalty APRs, cash advances, more than one balance on the card, new purchases, fees, minimum interest charges, and daily compounding by the actual length of each billing cycle. Fixed-rate cards and credit unions with rate caps may not follow prime. Real statements can differ by a few dollars, and the warning box itself is allowed to be off by up to 2 months. This is an estimate, not financial advice.
Words used here
- What is APR
- Annual percentage rate: the yearly interest rate on your card. Your statement lists your purchase APR, for example 22.36%.
- prime rate
- A benchmark rate that most large U.S. banks post. It moves with the Fed's rate: it went from 6.75% to 7.00% on Sept 17, 2026.
- margin
- The fixed amount your card adds on top of prime. If your agreement says 'Prime Rate plus 15.49%', your margin is 15.49%. The issuer can't raise the margin just because prime went up.
- variable APR
- An APR that moves with a public index such as the prime rate (APR = prime + margin). Most U.S. credit cards have one. A fixed-rate card does not follow prime.
- a minimum payment worked out
- Each card has its own formula, often a percent of the balance plus the month's interest, with a dollar minimum. Your statement or cardholder agreement shows yours.
- average daily balance
- Your balance averaged over every day of the billing cycle. Card interest is usually charged on it. This calculator uses equal months, like the warning box on your statement.
- What is negative amortization
- When a payment doesn't cover the month's interest, the balance doesn't go down (it can even grow), so the debt is never paid off at that payment.