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True Cost Calculator

Find out exactly how much that purchase will actually cost you after factoring in the interest you'll pay over time.

Purchase Details

Enter the cost of the item and how you plan to pay for it.

Fill out the purchase details and click "Calculate True Cost" to see the real price of the item.

How to Use the True Cost Calculator

The True Cost Calculator is designed to reveal the hidden cost of financing a purchase. When you buy something on credit—like a TV, furniture, or a vacation—the sticker price is rarely what you actually pay. By calculating the total interest over time, you can see the "true cost" of your purchase.

Understanding the Input Options

To find out exactly how much you are paying, enter the following details:

  • Item Price: The sticker price or total retail cost of the item you want to buy.
  • Down Payment: The amount of money you are paying upfront in cash. This directly reduces the amount you need to finance.
  • Interest Rate (%): The Annual Percentage Rate (APR) on your credit card or store financing plan. Store credit cards often have APRs of 25% or higher!
  • Monthly Payment: The amount you plan to pay each month towards this purchase until it is fully paid off.

Why Does "True Cost" Matter?

A $5,000 purchase can easily cost over $10,000 if you only make small monthly payments at a high interest rate. Seeing the True Cost can help you decide if the item is really worth it, or if it makes more sense to save up and pay in cash to avoid interest entirely.

Frequently Asked Questions

Frequently Asked Questions

The true cost is the sticker price of the item PLUS all the interest you pay to finance it. If you finance a $1,000 laptop and pay $500 in interest over 3 years, the true cost is $1,500.
They can be, but you must read the fine print. Many of these offers use 'deferred interest.' If you don't pay off the entire balance before the 12 months end, you will be retroactively charged interest for the entire year on the original purchase amount.
The best way is to pay in cash. If you must finance, make the largest down payment possible, secure the lowest interest rate, and pay it off as quickly as you can by making larger monthly payments.