1. What is the Credit Card Savings Calculator?

The Credit Card Savings Calculator helps you determine how much you can save monthly by either lowering your APR or changing your repayment strategy. It compares the interest you would pay under two different scenarios.

2. How Does the Calculator Work?

The calculator uses the simple equation:

Where:

• \( I_{old} \) — Interest paid with original APR or payment plan
• \( I_{new} \) — Interest paid with new APR or payment plan
• \( S \) — Your monthly savings

Explanation: The equation simply calculates the difference between what you were paying and what you would pay under the new terms.

3. Importance of Calculating Savings

Details: Understanding potential savings can help you make informed decisions about balance transfers, negotiating lower rates, or adjusting repayment strategies to pay off debt faster.

4. Using the Calculator

Tips: Enter your current monthly interest payment and the projected interest payment under new terms. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find my current interest payment?
A: Check your credit card statement under the "Interest Charges" section.

Q2: How can I estimate my new interest payment?
A: Use a credit card payment calculator with your new APR or repayment amount.

Q3: Does this include principal payments?
A: No, this only calculates interest savings. Your total payment would be principal plus interest.

Q4: Can I use this for multiple credit cards?
A: Yes, but you'll need to calculate each card separately and sum the results.

Q5: Are there other ways to save on credit card interest?
A: Yes, consider balance transfer cards with 0% introductory APR or personal loans with lower rates.