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 ($)
• R — Monthly interest rate (APR / 12, as a decimal)
• D — Monthly payment ($)

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 credit card balance, annual percentage rate (APR), and your planned monthly payment amount. The calculator will show your payoff timeline and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: How does increasing my payment affect the schedule?
A: Even small increases in monthly payments can significantly reduce total interest and shorten payoff time.

Q2: What if I make only minimum payments?
A: Minimum payments mostly cover interest, resulting in much longer payoff times and higher total interest costs.

Q3: How is monthly interest calculated?
A: Interest is calculated daily but compounded monthly based on your average daily balance and APR.

Q4: Can I use this for other types of loans?
A: This calculator works for any simple interest loan, though mortgage loans often have different payment structures.

Q5: Why does my credit card statement show different numbers?
A: Statements may include fees, new purchases, or different calculation methods that aren't accounted for here.