1. What is Credit Card Loan Amortization?

Credit card loan amortization is the process of paying off debt with regular payments over time. Each payment covers both interest and principal, with the interest portion decreasing while the principal portion increases with each payment.

2. How Does the Calculator Work?

The calculator uses the loan amortization formula:

Where:

• \( PMT \) — Monthly payment amount
• \( P \) — Principal balance (credit card debt)
• \( r \) — Monthly interest rate (APR ÷ 12)
• \( n \) — Number of months to repay

Explanation: The formula calculates the fixed monthly payment required to pay off the credit card balance in full over the specified period, including interest.

3. Importance of Amortization Calculation

Details: Understanding your amortization schedule helps you plan debt repayment, compare payment options, and see the true cost of carrying credit card debt over time.

4. Using the Calculator

Tips: Enter your current credit card balance, monthly interest rate (divide APR by 12), and desired repayment period in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I find my monthly interest rate?
A: Divide your annual percentage rate (APR) by 12. For example, 18% APR becomes 0.18 ÷ 12 = 0.015 monthly rate.

Q2: What if I make additional payments?
A: Extra payments reduce principal faster, decreasing total interest paid and shortening repayment time.

Q3: Why is my total payment much higher than my balance?
A: This shows the cost of interest over time. High interest rates and long repayment periods significantly increase total cost.

Q4: What's the best repayment strategy?
A: Pay as much as possible each month to minimize interest. Consider the debt avalanche method (paying highest-rate cards first).

Q5: Should I use this for balance transfer calculations?
A: Yes, but remember to account for any balance transfer fees and the new card's interest rate after any introductory period.