1. What is Credit Card Amortization?

Credit card amortization shows how each payment is split between interest and principal reduction. It helps you understand how long it will take to pay off your balance and how much interest you'll pay.

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 reduces the principal balance.

3. Importance of Amortization Schedule

Details: Understanding your amortization schedule helps you see the true cost of carrying credit card debt and can motivate you to pay more than the minimum payment.

4. Using the Calculator

Tips: Enter your current credit card balance, APR, and your planned monthly payment. The calculator will show how long it will take to pay off and how much interest you'll pay.

5. Frequently Asked Questions (FAQ)

Q1: Why does most of my payment go to interest at first?
A: When your balance is high, the interest charge is larger, leaving less of your payment to reduce the principal.

Q2: How can I pay off my credit card faster?
A: Increase your monthly payment amount. Even small increases can significantly reduce payoff time and total interest.

Q3: What if I only make minimum payments?
A: Minimum payments typically cover mostly interest, resulting in very slow principal reduction and high total interest costs.

Q4: Does this calculator account for additional charges?
A: No, it assumes you won't add new charges to the card while paying it off.

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual results may vary slightly due to rounding or if your issuer uses daily compounding.