1. What is Credit Card Amortization?

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

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• Outstanding Balance — Remaining principal at start of month ($)
• APR — Annual Percentage Rate (converted to monthly decimal)
• Monthly Payment — Fixed payment amount ($)

Explanation: Each payment first covers the interest due, then any remaining amount reduces the principal balance.

3. Importance of Amortization Schedule

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

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Why does my balance decrease slowly at first?
A: Early payments are mostly interest. As your balance decreases, more of each payment goes toward principal.

Q2: What if my payment only covers the interest?
A: Your balance won't decrease. You need to pay more than the interest charge to make progress.

Q3: How can I pay off my card faster?
A: Increase your monthly payment amount. Even small increases can significantly reduce payoff time and total interest.

Q4: Does this account for minimum payments?
A: No, this assumes fixed payments. Credit card minimums are typically 1-3% of balance plus interest.

Q5: What about additional charges or fees?
A: This calculator assumes no new charges. For accurate results, stop using the card while paying it off.