If you want to seriously pay debts your credit card, it is important to learn about balance and interest associated with your account. When you understand the calculations involved with determining your new balance and interest charges you pay each month, you can make better decisions on how to pay the account faster. Collect basic information about your credit card account, including your current balance to open the annual interest rate, known as the APR, for starters.
Instructions
Calculation of interest charges
Divide your annual APR by 365, which is the number of days in the year, to get the daily interest rate. For example, if your annual APR is 12%, the daily interest rate is de.0329%.The percentage rate to convert a decimal number, which in this case est.000329.
Multiply the daily interest rate by the average daily balance on your credit card account. It is the balance on each day of the month added up and then divided by the number of days in the billing period. If the average daily balance is $ 5,000 and you multiply by the daily interest rate de.0329, you pay about $ 1.65 per day, which is 5000 fois.000329.
Multiply the daily interest charges by the number of days in the billing period to estimate the cost of monthly interest. For a period of 30 days of billing, the interest charges are $ 49.35 in this example.
New balance calculation.
Start with your opening (prior month) balance of the credit card. Suppose a balance of $ 5 000 for this example.
Calculate your interest charges, as described in the first section and add it to the balance.Use the example of $ 49.35.
Add new charges added to your account, skip this step if you do not add new charges to the card. Take on new charges of $ 100.
Subtract the amount of any payment you have made for the month in question. Suppose a payment of $ 200. The result is your new balance, which is $ 4949.35 here.
Tips & Warnings
Exact calculations for interest may vary depending on your credit card provider.
Instructions
Calculation of interest charges
Divide your annual APR by 365, which is the number of days in the year, to get the daily interest rate. For example, if your annual APR is 12%, the daily interest rate is de.0329%.The percentage rate to convert a decimal number, which in this case est.000329.
Multiply the daily interest rate by the average daily balance on your credit card account. It is the balance on each day of the month added up and then divided by the number of days in the billing period. If the average daily balance is $ 5,000 and you multiply by the daily interest rate de.0329, you pay about $ 1.65 per day, which is 5000 fois.000329.
Multiply the daily interest charges by the number of days in the billing period to estimate the cost of monthly interest. For a period of 30 days of billing, the interest charges are $ 49.35 in this example.
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| EXPLANATION OF A GOOD CREDIT SCORE |
New balance calculation.
Start with your opening (prior month) balance of the credit card. Suppose a balance of $ 5 000 for this example.
Calculate your interest charges, as described in the first section and add it to the balance.Use the example of $ 49.35.
Add new charges added to your account, skip this step if you do not add new charges to the card. Take on new charges of $ 100.
Subtract the amount of any payment you have made for the month in question. Suppose a payment of $ 200. The result is your new balance, which is $ 4949.35 here.
Tips & Warnings
Exact calculations for interest may vary depending on your credit card provider.
