1. What is Credit Card Amortization?

Credit card amortization is the process of paying off debt with regular payments over time. Each payment covers both interest charges and reduces the principal balance.

2. How Does the Calculator Work?

The calculator uses the amortization formulas:

Where:

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

Explanation: The calculator generates a month-by-month breakdown showing how much of each payment goes toward interest versus principal.

3. Importance of Amortization Schedule

Details: Understanding your amortization schedule helps you see the true cost of credit card debt and how making larger payments can save you money on interest.

4. Using the Calculator

Tips: Enter your current balance, APR, and planned monthly payment. The calculator will show how long it will take to pay off and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: Why does most of my payment go to interest at first?
A: Early in repayment, your balance is highest so interest charges are largest. As principal reduces, more payment goes toward principal.

Q2: How can I pay off my credit card faster?
A: Increase monthly payments, make biweekly payments, or pay more than the minimum whenever possible.

Q3: What happens if I only pay the minimum?
A: You'll pay much more in interest and take much longer to pay off the debt. Minimum payments often barely cover interest.

Q4: Does this calculator account for new charges?
A: No, this assumes no additional charges are made to the card during repayment.

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual payments may vary slightly due to rounding or changes in APR.