1. What is the Payoff Schedule?

The payoff schedule shows how each payment is applied to your credit card balance, including how much goes toward interest and principal each month until the balance is paid in full.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Balance_t \) — New balance after payment
• \( Balance_{t-1} \) — Previous balance
• \( r \) — Monthly interest rate (APR/12)
• \( PMT \) — Monthly payment amount

3. Importance of Payoff Planning

Details: Understanding your payoff schedule helps you see the true cost of credit card debt and make informed decisions about payment strategies.

4. Using the Calculator

Tips: Enter your current balance, APR, and planned monthly payment. The calculator will show your complete payoff schedule.

5. Frequently Asked Questions (FAQ)

Q1: What happens if I make only minimum payments?
A: Minimum payments typically cover mostly interest, resulting in much longer payoff times and higher total interest.

Q2: How can I pay off my credit card faster?
A: Increase your monthly payment amount, even by small increments, to significantly reduce payoff time and interest.

Q3: What's the snowball vs avalanche method?
A: Snowball pays smallest balances first for motivation; avalanche pays highest interest first to save money.

Q4: Should I consider balance transfers?
A: A 0% APR balance transfer can save interest if you can pay off during the promotional period.

Q5: How accurate is this calculator?
A: It assumes fixed payments and APR. Actual results may vary if your APR changes or you make additional charges.