The article will show you how to make a credit card debt reduction calculator for Excel. In our daily life, we should spend our money in a calculative way. If we donâ€™t keep track of our expenses, we might end up losing all the money before the month ends, and hence, we become dependent on other peopleâ€™s loans. However, the credit card has become a powerful medium of money transaction in our daily life as we can buy things using it and pay the dues of those products in consecutive months. We can use Excel effectively to keep track of credit card debts by using a debt reduction calculator and understand how we should use our earnings to reduce the debts

Suppose, you have 5 credit cards and you use them to mitigate your expenses. In the following picture, you will see the necessary data to calculate credit card debt reduction.

**Step 1: Inserting Credit Card Debt Data for Reduction Calculator**

First, we need to insert the data of necessary parameters to calculate credit card debt reduction.

- Put the Credit Card Balance, Interest Rate, and Monthly Payment in the Excel sheet.

- After that, use the following formula to calculate the Total Balance.

`=SUM(C6:C10)`

The formula uses **the SUM function **to return the Total Balance of all the Credit Cards.

- Similarly, use the following formula to calculate the Total monthly payments.

`=SUM(E6:E10)`

- Thereafter, insert this formula in cell
**C13**to determine the Average Interest Rate.

`=SUMPRODUCT($C$6:$C$10,$D$6:$D$10)/SUM($C$6:$C$10)`

The formula here uses **the SUMPRODUCT function **to calculate the summation of the product between the Balance and the Interest Rate. Then we divide this resultant value by the Total Balance to calculate the Average Interest Rate.

**Step 2: Summarizing Credit Card Debts in Excel**

In the following steps, you will see the process of rearranging the parameters. Say your Repayment Balance is 900 dollars. We will be doing this process in a new sheet.

- First, we need to insert some data from the previous sheet which was named Debt Data.

- Similarly, we insert the Average Interest Rate and Total Monthly Payments.

- After that, type the following formula to calculate the Average Monthly Interest.

`=C6*C7/12`

- Next, write down the following formula to get the Extra Repayments.

`=C11-C10`

**Read More: **Debt to Income Ratio Calculator in Excel

**Step 3: Calculating the Credit Card Debt Reduction Amount with Excel Formula**

This is the final step where we are going to show you the reduced value that you need to repay from your corresponding credit card. You can repay the money in these possible ways: you can either pay the Higher Interest Balance or the Lowest Balance first according to your convenience.

- To pay the Highest Interest Balance first, use the following formula. Here Iâ€™m doing this calculation in another new sheet.

`=INDEX('Debt Data'!B6:E11, MATCH(MAX('Debt Data'!D6:D11),'Debt Data'!D6:D11, 0), 1)`

Here, we used the **INDEX **and **MATCH **functions in order to insert the payable debts of the credit card.

**MAX(â€˜Debt Dataâ€™!D6:D11) â€”->**returns the maximum interest rate from the**Debt Data**sheet with the help of**the MAX function**.- Output:
**12**(**12%**)

- Output:
**MATCH(MAX(â€˜Debt Dataâ€™!D6:D11),â€™Debt Dataâ€™!D6:D11, 0) â€”->**then turns into**MATCH(0.12,â€™Debt Dataâ€™!D6:D11, 0) â€”->**which provides the position of**12**in the**D6:D11**column of the**Debt Data**sheet.- Output:
**1**

- Output:
**INDEX(â€˜Debt Dataâ€™!B6:E11, MATCH(MAX(â€˜Debt Dataâ€™!D6:D11),â€™Debt Dataâ€™!D6:D11, 0), 1) â€”->**now becomes**INDEX(â€˜Debt Dataâ€™!B6:E11, 1, 1) â€”->**results into- Output:
**Card 1**

- Output:

- After that, we use the same formula but change the
**[column_num]**of the**INDEX**function to 2 to get the Balance.

- Similarly, change the
**[column_num]**to 3 and 4 to get the Interest Rate and Monthly Payment.

- After that, type the following formula to determine the New Payment.

`=E6+Summary!C13`

- If you choose to repay the lowest balance first, first determine the credit card that has the Lowest Balance using the following formula.

`=INDEX('Debt Data'!B6:E11, MATCH(MIN('Debt Data'!C6:C11),'Debt Data'!C6:C11, 0), 1)`

This formula is pretty similar to the one that we use to determine the Creditor of the highest interest rate. It just has **the MIN function **instead of the **MAX **function.

The other data can be found by changing the **[column_num]**.

- After that, type the following formula to determine the New Payment.

`=E10+Summary!C13`

Thus you can create a credit card debt reduction calculator for excel.

**Read More: **Pay off Credit Card Debt Calculator in Excel

**Download Practice Workbook**

## Conclusion

Thatâ€™s all for the article. Iâ€™ve tried to show you the way of creating credit card debt deduction calculation in an as simple way as possible. If you have any better methods or questions or feedback regarding this article, please share them in the comment box. This will help me enrich my upcoming articles.