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Credit Card Optimizer

The Credit Card Optimizer is designed to help you figure out the best way to spread your credit card debt among your current credit cards, and assess the potential benefits of shifting your debts to a new, lower rate card. To use this tool you will need to know your credit limit, current balances, and current interest rates for each of your credit cards. After you have entered this information, the optimizer will determine how you should redistribute your credit card debt to create the lowest monthly interest payment and pay down your debt as quickly as possible.

Credit Card Optimizing Calculator Overview

Having a credit card is more of a rule than an exception in the modern world. Today it is common to not only have credit cards, but to also have a lot of credit cards. In order to get the best value from your credit cards you should try to figure out how to distribute your credit card debt between your credit cards to minimize the amount of interest that you are paying on that debt. One way to do this is to use our Credit Card Optimizer.

Ideally, you want to pay off all your credit card debt each month, so you don't have to pay interest charges. Equally important, it means you won't dig yourself into a debt hole by spending more than you can afford.

However, many of us do carry a credit card balance from month to month, often distributed among several cards with different credit card rates and limits. In that situation, consolidating  the debt onto one or two lower-rate cards, or obtaining a lower-rate consolidation loan, can save a significant amount of money.

Many people are aware this strategy could reduce their total monthly payments and save them money, but they don't know how much. If they did, it might spur them to act. This calculator can show you exactly how much carrying debt on your higher-rate cards is costing you every month.


Using the Credit Card Optimizing Calculator

First, gather your current billing statements from all your credit cards, or check them online.  For each of them, you'll need:

  • Your current balance
  • The interest rate
  • Your credit limit

You do not need to manually enter the minimum monthly payment, as the calculator assumes this is the greater of $15 a month or 4 percent of your outstanding balance, which is typical for many credit cards.

Enter these amounts for each credit card you have, up to 10 cards, then click "calculate." The optimizer will transfer the balances from your higher-rate cards to your lower-rate ones, so far as the credit limits on each card allow.

The optimizer will tell you how much you should transfer from one card to another, and the ideal balance you should carry on each card for your current total credit card debt and the optimized payments you should make on each. It will also show you your new total monthly payment.

 It will also display a graph showing your total interest savings you would realize paying off your cards making the minimum monthly payments with an optimized distribution of your credit card debts vs. non-optimized.

Click "report" to see a list comparing your current credit vs. optimized card balances and payments. The report will also show your current vs. optimized payoff schedule, showing how long it will take to pay off your cards and the reduction in your outstanding balance and minimum payments over time.


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Transferring to a new credit card at a lower rate

You may have the option of obtaining a new card with a lower interest rate that you can transfer some or all of your credit card debt to.  If that is the case, check the box by "include new card" and enter the credit card rate and limit that would be available to you. The optimizer will then include that in its calculations.

Note that you can also use this option to estimate the impact of paying off your cards via a debt-consolidation loan with a lower interest rate, though the minimum monthly payment on such a loan may differ from what it would be with a credit card.