We have partnered with the Money Advice Service to bring you a credit card repayment calculator that will help you clear your credit card debt. You can use the credit card repayment calculator (at the foot of this page) to work out how long it will take you to clear your debt based on:
your outstanding credit card balances
the monthly or annual interest rate you are paying
the amount you can afford to repay each month
In addition, you can use the calculator to calculate how much you need to repay each month in order to repay your credit card debt by a desired date. But first I explain how to build a plan to become debt free and how to get the most out of the credit card repayment calculator.
How to become debt free in 5 steps
1. Pay off debt with savings
If you have credit card debt and are still saving you must be mad! You are getting virtually no interest on your savings but paying out huge amounts of interest to your credit card company. You are losing money! Stop now and get your priorities sorted.
2. Get the best interest rate
List the outstanding balance, interest rate and minimum monthly payment for each of your credit cards, with the highest interest rate at the top and lowest at the bottom.
Total up your outstanding balances and your minimum monthly payments.
Now work hard to get the best rate for your outstanding debt. Research the best 0% balance transfer credit card deals, best long-term deals and talk to your credit card company to try and get the interest rate on your debt as low as possible. If you can switch your debt to a lower rate more of your monthly payments will go towards clearing the capital you owe and not be eaten up by interest charges – which means you will slash the time it takes to eradicate the credit card debt that burdens your life.
Remember, always restructure your debt when 0% or short-term deals end.
3. Get the best repayment plan
Make sure all your monthly credit card payments are set up on direct debit.
Make sure all the direct debits are set up for the minimum monthly payment except the one with highest interest rate.
The direct debit for the top interest bearing credit card should be set at the maximum you can afford. If you are serious about ending your credit card nightmare then put every spare penny you’ve got into clearing this debt fast.
Once you have cleared the balance on the first credit card just repeat the same process on every card down the list until you are free from credit card debt.
4. Stick to your plan
Repaying your credit card debt will take time.
Work out when you will be credit card debt free by using the credit card repayment calculator below and put this date in your diary. Always remain focused on this goal.
5. Cut up your credit cards
This way you will never return to the old days of your credit card debt being out of control.
Credit card repayment calculator
Where to get free debt advice
If you find yourself struggling with your debts then you probably need some help and advice. Rather than respond to an advert for a payday loan or seek the services of a debt management management company, which will probably make matters worse, why not access one of the many free options for debt advice.
National Debtline
Offers free debt advice over the telephone, specialist advice is backed up with a range of self-help material.
www.nationaldebtline.co.uk
Consumer Credit Counselling Service
Charity offering free debt advice since 1993 helping around 400,000 each year. Sign up for a useful newsletter offering money advice and how to avoid debt.
www.cccs.co.uk
Debt Advice Foundation
Debt advice and education charity established in 2002 and has a developed a useful range of educational material aimed at schoolchildren.
www.debtadvicefoundation.org
Citizen Advice Bureau
Offers excellent advice on a variety of topics including debt. You can obtain advice from a CAB centre, over the telephone or via their excellent website offering a number of self help guides.
www.adviceguide.org.uk
www.citizensadvice.org.uk
Business Debtline
Offers free and confidential advice for small businesses with a broad selection of self help guides
www.bdl.org.uk