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The Debt Calculator

Click on a purchase below to see compounding interest in action.
  • Concert Tickets $199
  • Spring Break $2,500
  • Used Car $1,700
  • College Textbooks $500

What's the real cost of credit?

Compounding interest is great when you are earning it! But, be careful if you're carrying a debt. If you owe a balance on a credit card or other loan, interest is calculated on the balance you owe and increases your debt if you do not pay off the balance in full. You will be charged each month that you hold an unpaid balance.

It's your best friend's birthday in three days, and she can't stop talking about the concert tickets she's expecting to get from her parents. You overheard that her parents did not buy her the concert tickets and instead purchased her a gift card to pick out some new clothes. You know how much this means to her - and you like the band too - so you purchase two tickets and charge $199 to your new credit card. Since you just got a job lifeguarding at the local pool, you figure you can afford to pay it off.

The most you can pay each month is $35.
Your minimum payment is $10 a month.

  • Enter the amount you wish to pay
    each month (within the above range)
    to see the real cost of your
    purchase when using credit.

  • Your interest rate is:

    15.85%
calculate

Your school has arranged a Spring Break trip for students who'd like to visit various destinations in Europe, over the course of 7 days. You've asked your parents for their permission and they agreed it would be a good experience, but expect you to pay for it. They tell you they'll charge it to their credit card but you need to pay the monthly bill. You don't want to pass up the opportunity, so you make the deal with your parents.

The most you can pay each month is $55.
Your minimum payment is $34 a month.

  • Enter the amount you wish to pay
    each month (within the above range)
    to see the real cost of your
    purchase when using credit.

  • Your interest rate is:

    15.85%
calculate

Great news: Your parents say you may have your own car when you're a high school junior, but the bad news is that you must buy it yourself. By your junior year, you have only $300 saved up, but you just can't wait until you have more. You find a car that costs $1,700 and you put it on your charge card. You must pay your car insurance bill each month and you need to have some money for everyday expenses.

The most you can pay each month is $85.
Your minimum payment is $23 a month.

  • Enter the amount you wish to pay
    each month (within the above range)
    to see the real cost of your
    purchase when using credit.

  • Your interest rate is:

    15.85%
calculate

You've just graduated high school - and the hard work is just about to begin. You received your list of required textbooks and they're going to cost nearly $500! The cost of attending college is really adding up. You and your parents sat down and created a plan to budget for college - but you forgot to factor in textbooks. You tell them you're confident you can charge the books to your credit card.

The most you can pay each month is $100.
Your minimum payment is $15 a month.

  • Enter the amount you wish to pay
    each month (within the above range)
    to see the real cost of your
    purchase when using credit.

  • Your interest rate is:

    15.85%
calculate

The Results

At $XX a month, it will take you XX months, and you will pay over $X,XXX.XX for your purchase. And all the time you are paying off this debt, you cannot use this money to buy other things that you might want.

Try again and see what happens when you pay more towards your debt.