Debts

Revolving card: how long you take to pay it off

What a revolving card balance costs when the payment is a fixed amount each month or a percentage of what you owe.

What it does

It starts from a balance and a TAE, and simulates the balance month by month until it reaches zero. There are two modalities, the ones that appear in the terms and conditions of most cards: paying a fixed amount each month, or paying a percentage of what you owe with an agreed minimum payment. With the fixed one, 3.000 € at 22 % with 90 € a month is paid off in 50 months and costs 1.421,67 € in interest. With 3 % of the balance and a minimum of 25 €, 142 months and 3.019,17 € in interest: the same balance, a different story, because the payment shrinks along with the balance.

Key concepts

• TAE: the Tasa Anual Equivalente is the annual cost of the credit with all the expenses included. It is an effective annual rate, so the interest for each month is not the TAE divided by twelve, but the twelfth root of 1 + TAE: (1 + tae/100)^(1/12) − 1.
• Outstanding balance: what remains to be repaid each month. It grows with the interest before the payment arrives and falls afterwards. The calculator's series is that curve.
• Fixed payment: a constant amount until it is finished. If the balance is small relative to the payment, the last month pays whatever is left and the total barely falls.
• Percentage and minimum payment: many cards charge a percentage of what you owe, with an agreed minimum, and the lender applies whichever is higher. With a high balance the percentage rules; with a low balance, the minimum does.
• TEDR: the Tipo Efectivo Definición Restringida of the Banco de España is the average rate on new deferred-payment credit card operations. It does not include fees, and the month it publishes is not necessarily the month in which a specific card was taken out.

Frequently asked questions

Why is it not paid off in the months that come out of dividing the debt by the payment?

Because as long as there is a balance, interest is added. If each month's payment were exactly the share of debt that falls on you, the interest on what you still owed would be added every month and you would never reach zero. The calculator simulates it month by month in that order, which is how a card works.

What happens if the payment does not even cover the interest?

The debt does not fall: the balance grows, and the following month the interest is higher still. The calculator does not return an enormous term, it returns "With this payment the debt never falls". A payment below the interest is not slow debt: it is debt that never amortises.

What does 3.000 € at 22 % with 90 € a month cost?

Fifty months, with 1.421,67 € in interest and 4.421,67 € paid in total. The fixed payment is the modality easiest to compare across cards, because the number that comes out each month is the same.

And if I pay a percentage of the balance?

With 3 % of the balance and a minimum of 25 €, the same 3.000 € at 22 % takes 142 months and costs 3.019,17 € in interest. The payment falls as the balance falls, so the debt is closed slowly even if the first month's payment looks high.

What limits do the fields have?

The balance runs from 1 to 100.000 €, the TAE from 0 % to 60 %, the fixed payment from 1 to 100.000 €, the percentage from 0,1 % to 100 % and the minimum from 0 to 10.000 €. The simulation stops at 1.200 months (one hundred years): if the debt has not been paid by then, the result is that it never falls.

What does this page not calculate?

It does not forecast new purchases, nor late-payment surcharges, nor maintenance, cash-advance or deferred-payment fees, nor changes in the rate over time, nor penalties for cancelling early. The account only knows the balance, the TAE and the payment you type. The balance on a real card rises and falls with the spending of each month, and no simulation knows that.

What is the TEDR that appears next to the result?

It is the average rate on new deferred-payment credit card operations from the Banco de España, with its month and its source. It is shown as context and there it stays: the Banco de España defines it without fees, and its series corresponds to each month of its publication, not to the month in which a specific card was taken out. The calculator does not subtract it from your TAE nor calculate any difference between the two numbers, because they do not refer to the same contract.

What does the case law say about these rates?

STS 258/2023 explains, in general terms, that what is reviewed when a high rate is disputed is its comparison with the normal rate for operations on that product at the time of taking out the contract, and that when the reference series is a TEDR the applicable adjustments apply. This page does not assess your contract nor activate any automatic threshold: the TEDR it shows is the rate currently in force and not the one from the month of taking out the contract, so using it as a reference for a specific contract would give a wrong answer. What applies is the contract and the data of the case, not a calculator.

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