1. What is Credit Card Amortization?

Credit card amortization is the process of paying off debt with regular payments over time, where each payment covers both interest charges and principal reduction. This calculator helps you understand how your payments are allocated across multiple credit cards.

2. How Does the Calculator Work?

The calculator uses these formulas for each credit card:

Where:

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

Explanation: The calculator shows how each payment is split between interest and principal, and how your balance decreases over time.

3. Importance of Amortization

Details: Understanding amortization helps you see the true cost of credit card debt and plan effective payoff strategies, especially when managing multiple cards.

4. Using the Calculator

Tips: Enter the number of cards, then for each card provide the current balance, APR, and your planned monthly payment. The calculator will show detailed payment schedules.

5. Frequently Asked Questions (FAQ)

Q1: Why does most of my early payment go to interest?
A: This is normal with amortizing debt - early payments have more interest because the balance is higher. As the balance decreases, more of each payment goes to principal.

Q2: How can I pay off my cards faster?
A: Increase monthly payments, focus on highest APR cards first (avalanche method), or consider balance transfers to lower-rate cards.

Q3: What if I only make minimum payments?
A: The calculator will show it takes much longer to pay off and costs significantly more in interest. Always pay more than minimum if possible.

Q4: Does this account for variable APRs?
A: No, this assumes fixed APR. For variable rates, you'd need to recalculate when rates change.

Q5: How accurate is this calculator?
A: It provides accurate estimates based on your inputs, but actual payments may vary slightly due to rounding or billing cycle differences.