Amortization Schedule

Amortization Tables

Amortization Tables Reveal Shocking Facts About Credit Card Debt

Getting a credit card is one thing. Handling that card responsibly is another. When you rack up high credit card debt, it can take years and years to pay it off. Amortization tables for carrying high interest rate debt can show why.

Amortization tables or charts, are nothing more than graphics that show how a lender treats the monthly payments you send to pay off your loan. These tables clearly show how much of a payment goes on the principal, or the actual money borrowed, and how much goes to paying off the interest charges. The black and white numbers, especially for credit card payments, can be rather astonishing. All it takes to see what happens with credit card debt is to find an amortization calculator and punch in the numbers. To make amortization tables for this debt to show why people get themselves in so much trouble, needs a few basic numbers. The first number is the principal amount, or how much you charged on your Visa card. The second number is the interest rate the lender charges for borrowing its money. The third is the minimum payment amount. When you crunch these numbers and create an amortization chart, the results make it plain to see why even a small credit card debt can turn into years and years of payments.

The benefits of creating amortization tables for credit card debt are many, especially for the first-time credit card users. They can:

  • Help steer people away from racking up too much debt in the first place. This is a great use of amortization tables. Parents, for example, can create mock ones to show their newly credit worthy offspring what happens with this revolving loan after a few months. The numbers can get financially scary, especially with high interest rate cards.
  • Shows why minimum payments are not wise to make. The use of loan amortization tables for showing this is wise move. The reality is credit card companies want people to make minimum payments so they can keep adding on charges and fees to that initial debt. The lower the payment made on a credit card, the longer the debt servicing will go on.
  • Can show why you should avoid charging for items you cannot afford. Amortization tables for credit card debt can show the value of only charging what you can paid off at the end of the month more quickly than any other route. The numbers don't lie.
While amortization tables are more readily drawn up for large loans like mortgages and auto financing, they can be beneficial for showing the real cost of credit card debt. If teaching an advanced lesson is in order, amortization tables can help send the message home.

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