Methodology and formulas
Fixed-payment payoff
Each month the model adds interest equal to beginning balance × APR/12, then subtracts the payment. It repeats until the balance reaches zero. If a payment does not cover monthly interest, the tool warns that the balance will not amortize under the assumptions.
Target payoff payment
For monthly rate r, balance P and number of months n, payment = P × r ÷ [1 − (1+r)^(-n)]. When r is zero, payment = P/n. Rounding of actual issuer payments can create small differences.
Balance-transfer comparison
The transferred starting balance includes the percentage fee. Both transfer and current-card scenarios apply the same monthly payment during the introductory window. The result compares remaining balances and interest/fees during that window, not lifetime savings or post-intro charges.
Utilization and target paydown
Utilization = total balances ÷ total limits × 100%. Target paydown = max(0, current balances − limits × target percentage/100). This is arithmetic only, not a credit-score model.
Approximate daily-balance interest
Interest estimate = average daily balance × APR/100 × cycle days/365. A leap-year or issuer-specific day-count convention may differ.
Minimum-payment model
Monthly interest is added first. Payment is the larger of the modeled percentage of balance and a fixed floor, capped at the amount owed. If this would not cover interest, the model warns rather than pretending debt declines. The simulation stops at 600 months.
Important omissions
All models exclude new transactions, annual fees, late fees, penalty APR, promotional expiration unless specifically modeled, issuer payment allocation, changing credit limits, and taxes. These tools do not provide lending, legal, or individualized financial advice.