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. This calculator shows how extra payments can accelerate debt payoff.

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 month's payment first covers the interest charge, then any remaining amount reduces the principal.

3. Importance of Extra Payments

Details: Even small extra payments can significantly reduce total interest paid and shorten payoff time by allowing more of each payment to go toward principal.

4. Using the Calculator

Tips: Enter your current balance, APR, minimum payment, and any extra amount you can pay. The calculator shows how much interest you'll pay and creates an amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: How much should I pay extra?
A: Any amount helps, but even $20-50 extra per month can save hundreds in interest and months of payments.

Q2: Why does most of my payment go to interest at first?
A: With high balances, interest charges consume most of the minimum payment. As the balance decreases, more goes to principal.

Q3: Should I pay extra or save money?
A: Generally pay off high-interest debt first (APR > 6-8%), as it's hard to earn equivalent returns on savings.

Q4: What if I can't make extra payments?
A: Focus on paying at least the minimum on time. Consider balance transfer cards or debt consolidation if struggling.

Q5: How accurate is this calculator?
A: It assumes fixed payments and APR. Actual results may vary if your APR changes or you make different payments.