1. What is Credit Card Amortization?

Credit card amortization shows how each payment is divided between principal and interest over time. 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 reduces the principal. As the balance decreases, less goes to interest and more to principal.

3. Importance of Amortization Schedule

Details: Understanding your amortization schedule helps you make informed decisions about paying down debt faster and minimizing interest costs.

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 paid.

5. Frequently Asked Questions (FAQ)

Q1: Why does most of my payment go to interest at first?
A: Interest is calculated on the outstanding balance, which is highest at the beginning. As you pay down principal, less goes to interest.

Q2: How can I pay off my credit card faster?
A: Increase your monthly payment, even by a small amount. This reduces principal faster and saves significant interest.

Q3: What if I only make minimum payments?
A: Minimum payments mostly cover interest, leading to much longer payoff times and higher total interest costs.

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

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.