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 and principal, with the interest portion decreasing as the balance decreases.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

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

Explanation: Each payment first covers the interest due, then the remainder goes toward reducing the principal.

3. Importance of Payoff Schedule

Details: Understanding your payoff schedule helps you see the true cost of carrying credit card debt and motivates faster repayment to save on interest.

4. Using the Calculator

Tips: Enter your current balance, annual interest rate, and 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: What if I make larger payments?
A: Larger payments will pay off your debt faster and save you money on interest. Try increasing the payment amount to see the impact.

Q2: What's the minimum payment trap?
A: Making only minimum payments extends payoff time dramatically and increases total interest paid significantly.

Q3: How accurate is this calculator?
A: It assumes fixed payments and interest rates. Actual results may vary if your interest rate changes or you make different payment amounts.

Q4: Should I prioritize high-interest cards first?
A: Yes, paying off high-interest cards first (avalanche method) saves the most money, though some prefer the psychological wins of the snowball method.

Q5: Can I see the full amortization schedule?
A: This calculator shows summary results. For a month-by-month breakdown, consider using a spreadsheet or more detailed calculator.