Tracking credit card payments is a very important monthly task that you just can’t afford to miss. From maintaining a good credit score to avoiding heavy penalties on late payments, you must use spreadsheets to make computation and tracking tasks easier. You can create a credit card payoff spreadsheet to provide and determine the amount of debt you owe on your credit card and how long you need to pay off this debt.
Credit Card Payoff Spreadsheets
What is the best debt payoff method?
Mathematically speaking, the avalanche method is the most efficient way to get rid of your credit card debt. This involves listing your obligations from the highest to lowest, based on interest rates in a debt reduction spreadsheet.
The method requires the payment of the minimum amount on each, then dedicating as much as you can afford every month to your debt with the highest interest rate.
Debt Reduction Spreadsheets
How do I calculate debt payoff in Excel?
Another way to plan how to pay off your debts is through the use of the debt snowball method. For this, you need a credit card payoff spreadsheet along with a debt snowball calculator.
Use the debt payoff spreadsheet to make a plan then use the debt calculator Excel to determine with the time and amount you need to pay off all your debts. This method offers early results to inspire you to keep moving forward.
However, there are also those who believe that this is not the most effective way of settling your debts because leaving the biggest debts for last means that you will pay more interest rates. In other words, you will pay much more in the long run as experienced by those who followed this method. But the aspect of keeping you motivated to continue is a huge plus factor.
If you choose a method where you begin with the biggest loan, you won’t see much progress and this might continue until too much time has passed by, and you have lost motivation in making your regular payments.
It is, therefore, very important to select a method of payment that will keep you motivated, one that will inspire you to keep going until you reach your final goal of being completely debt-free. Following is a rundown of how you can calculate your payoff using a credit card payoff template in Excel:
- On the spreadsheet, enter all of your debts. Arrange these in order from the smallest to biggest.
- Every month, decide on a minimum amount you will put into your existing debts except for the smallest one. For your smallest debt, put in all of the money that you can every month. Keep doing this until you have paid it off completely.
- After that, place your money into your next smallest debt while you continue to pay the minimum amounts for all of your other debts.
- Keep repeating these steps as you complete each of your debts. If you can make more payments, you will have more money freed-up. It would be like a snowball getting larger and larger.
Many people prefer the debt snowball method because its focus is on our behavioral side. The method becomes very appealing, especially if you need motivation when making your payments.
When you have paid off your smallest debt in the debt snowball method, you take the amount you that you used to pay it off and add this to the minimum amount which you are already paying to your next smallest debt.
The process of paying off your smaller debts first makes a significant financial impact on your debts as time passes by. Each time you pay off a debt, the snowball would increase in size and this makes your pay off speed faster over time.
Debt Payoff Spreadsheets
How do I make a debt snowball spreadsheet?
To create a credit card payoff spreadsheet for your debt snowball method, you can use Excel. Here are the steps to create a perfect one.
- First, at the top of the spreadsheet, input the name of each of the loans you have and the corresponding interest rates. You will use the interest rate later, so it’s best to know it now. Leave a column between each of your debts to input the minimum amount for your loans.
- Next, input the total amount you owe for each of your loans in the cell right under the loan’s name. Also, under the payment column, input the minimum monthly amount in the third row.
- In the cell’s bottom right corner, you will see a small blue box. If you want to duplicate the minimum amount for each cell in the column, click the blue box then drag down as far as you need.
- Add the dates in the right column. Starting with the current month, input the name of the month along with the current year in the cell. Do this for about five years worth of months. This can be a time-consuming and tedious step.
- Calculate the actual amount that you pay with each payment. You only need one formula to calculate the estimated interest you have to pay with every payment. The formula involves starts with the total amount that you owe for the loan then multiplying this by the interest rate. After doing this, divide the amount by 12 to get your monthly interest.
What makes this credit card payment calculator Excel spreadsheet very flexible and efficient is that if you need to make changes in your monthly payments or if you have some extra money in a certain month, you would simply input the amount of money you’re putting toward your loan in the cell meant for minimum payments. This automatically updates the rest of the cells.
When you click then drag the cell down a column, it will copy the formula into each of the boxes that you have highlighted. Then it automatically updates your progress. Use this same method on your payments column every month. Repeat this process for each of your debts and loans using the proper cell numbers.
Should I pay off my credit card in full?
If you have the money, paying off your credit card in full is highly recommended and as quickly as possible. You won’t need a credit card payoff spreadsheet for this. Paying your credit card in full possibly saves you some money in interest and keeps your credit record healthy.