Suppose you owe Rs 300,000 on a card charging 36% a year, and you pay Rs 20,000 a month. The monthly
markup rate is 36% divided by 12, which is 3% a month. In the first month the card adds 3% of
Rs 300,000, that is Rs 9,000 of markup, so only Rs 11,000 of your Rs 20,000 payment actually reduces
the balance. Repeating that month after month, the balance clears in about 21 months. Over that time
you pay roughly Rs 104,559 in markup, so the Rs 300,000 balance costs about Rs 404,559 in total to
clear. The high rate is why so little of each early payment touches the principal, and why paying
well above the minimum is the fastest and cheapest way out.
Item
Value
Card balance
Rs 300,000
Annual markup rate
36%
Monthly payment
Rs 20,000
Time to clear
21 months
Total markup paid
Rs 104,559
Total repaid
Rs 404,559
How it is calculated
The tool amortizes the card balance one month at a time. Each month it charges markup at the annual
rate divided by twelve on whatever is still owed, adds that to the balance, then subtracts your fixed
payment. It counts the months until the balance reaches zero and sums the markup charged along the
way. Before it starts, it checks whether your payment even covers the first month of markup. If it
does not, the balance can only grow, so the tool flags that the debt never clears and asks you to pay
more. Total repaid is the original balance plus all the markup. Because markup compounds on the
shrinking balance, even a small increase in the monthly payment can cut both the months to clear and
the total markup sharply, which is the key lesson for high-rate card debt.
Frequently asked questions
Why does my credit card balance barely fall in Pakistan?
Card markup rates are high, often 30% or more a year, so a large slice of each payment goes to markup rather than principal. If you only pay the minimum, the balance can take years to clear and cost more in markup than the original purchase. Paying well above the minimum is the fastest way out.
What happens if my monthly payment is less than the markup charged that month?
If your payment does not cover the markup accrued in one month, the outstanding balance actually grows rather than falls. This calculator flags that situation directly and shows "Never" as the payoff timeline. The fix is straightforward: increase the monthly payment until it exceeds that first month of markup, which is the minimum threshold for the debt to shrink at all.
How much faster do I clear a balance by doubling my monthly payment?
The relationship is not linear, so the improvement is larger than most people expect. Because early payments are mostly markup, a bigger payment cuts the principal faster, which in turn reduces future markup, compounding the benefit. Use this calculator to enter your current payment and then double it to see the months saved and the total markup avoided.
Is a credit card in Pakistan considered a loan or a markup product?
Pakistani Islamic banking rules mean many cards are structured as a murabaha or tawarruq facility rather than an interest-bearing loan, but the practical effect is the same: a cost is applied to the outstanding balance each month. Whether the card calls it markup, profit, or a finance charge, the calculator works the same way. Enter the annual rate shown in your card agreement and the tool will amortise the balance correctly.