Debt
Glossary
Every term used in this calculator, defined plainly.
- APR (Annual Percentage Rate)
- The yearly interest rate on your credit card balance. Divide by 365 to get the daily periodic rate applied to your balance each day.→ The "APR" field in the calculator
- Daily Periodic Rate
- APR ÷ 365. The rate applied to your average daily balance each day. On a 22.99% APR card: 22.99/365 = 0.063% per day. Small but compounds quickly on large balances.
- Minimum Payment
- The lowest payment your issuer requires each month. Typically 1-2% of the balance or $25-35, whichever is greater. Paying only minimums keeps you in debt for decades on large balances.→ The "Minimum payment %" field
- Balance Transfer
- Moving a credit card balance from a high-rate card to a new card with a promotional 0% APR period (typically 12-21 months). A transfer fee (3-5%) usually applies. Effective when you can pay the balance before the promotional period ends.
- Credit Utilization
- Your total credit card balances divided by your total credit limits, expressed as a percentage. Under 30% is recommended for credit score health; under 10% is ideal.
- Grace Period
- The period (usually 21-25 days after statement close) during which you can pay your full statement balance without incurring interest. If you carry a balance, you lose the grace period and interest accrues from the transaction date.
Ready to calculate?
Put these terms to work.