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 these formulas:

Where:

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

Explanation: The calculator generates a month-by-month breakdown showing how each payment is split between interest and principal reduction.

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 reduce both interest costs and payoff time.

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 the total interest you'll pay.

5. Frequently Asked Questions (FAQ)

Q1: What happens if I make only minimum payments?
A: Minimum payments mostly cover interest, resulting in much longer payoff times and higher total interest costs.

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

Q4: Should I prioritize high APR cards first?
A: Yes, paying off higher interest debt first (avalanche method) minimizes total interest paid.

Q5: What's the difference between APR and interest rate?
A: APR includes both interest rate and fees, giving a more complete picture of borrowing costs.