1. What is Credit Card Debt Amortization?

Amortization is the process of paying off debt with regular payments over time. For credit cards, each payment covers both interest and principal, with the interest portion decreasing as the balance decreases.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• Outstanding Balance — Remaining principal at start of month ($)
• R — Monthly interest rate (APR / 12, as a decimal)
• D — Monthly payment ($)

Explanation: Each payment first covers the interest due, then the remainder goes toward reducing the principal.

3. Importance of Amortization Schedule

Details: An amortization schedule helps you understand how long it will take to pay off your debt and how much interest you'll pay. It's essential for debt repayment planning.

4. Using the Calculator

Tips: Enter your current credit card balance, APR, and your planned monthly payment. The calculator will show your repayment timeline and total interest costs.

5. Frequently Asked Questions (FAQ)

Q1: What happens if I pay more than the minimum?
A: Extra payments reduce principal faster, saving interest and shortening repayment time.

Q2: Why does my balance decrease slowly at first?
A: Early payments are mostly interest. As principal decreases, more of each payment goes toward principal.

Q3: How can I pay off debt faster?
A: Increase monthly payments, make biweekly payments, or transfer to a lower APR card.

Q4: What's the difference between APR and interest rate?
A: APR includes both interest rate and fees, giving the true cost of borrowing.

Q5: Should I focus on highest APR or smallest balance first?
A: Paying highest APR first saves most money; paying smallest balance first provides psychological wins.