1. What is the Credit Card Savings Calculator?

The Credit Card Savings Calculator helps you determine how much you can save by either lowering your APR or changing your repayment plan on credit card debt.

2. How Does the Calculator Work?

The calculator uses the simple savings formula:

Where:

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

Explanation: The formula calculates the difference between what you would pay in interest under your current plan versus a new plan.

3. Importance of Calculating Savings

Details: Understanding potential savings can help you make informed decisions about balance transfers, debt consolidation, or repayment strategies.

4. Using the Calculator

Tips: Enter both interest amounts in the same currency units. The calculator will show you the difference between the two amounts.

5. Frequently Asked Questions (FAQ)

Q1: How do I get the interest amounts to compare?
A: You can use credit card statements or online calculators to estimate interest under different scenarios.

Q2: Does this account for changes in monthly payments?
A: No, this is a simple difference calculator. For more complex scenarios, use a full repayment calculator.

Q3: What if my new interest is higher than the old?
A: The calculator will show a negative number, indicating increased costs rather than savings.

Q4: Should I include fees in the interest amounts?
A: For complete accuracy, include any balance transfer or annual fees that would affect total costs.

Q5: How often should I recalculate potential savings?
A: Recalculate whenever your balance changes significantly or when new offers become available.