5 Ways To Calculate Credit Card Interest

If you have a credit card, you’re probably familiar with the term annual interest (APR). [1] X Annual interest charged on the inspector’s balance sheet or credit card statement. This term can actually be misleading, as credit card invoices do not charge annual interest. However, the deferred / forward rate (6 months annual rate 0%!) Will expire after a certain period of time, so be sure to check if the rate changes. [2] X Source Research To keep your money low, you need to know how to calculate the actual interest on your monthly credit card invoice.

Calculation of fixed and variable interest

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Understand how these two flowers are similar and different from each other. Both apply to regular purchases that are charged to your credit card as a sort of “purchase ” APR. To calculate the monthly interest you pay, you need to know the regular daily interest rate (DPR). This will be explained in the next step. Please note that if you pay before the end of the billing period, you do not have to pay interest on these two April “purchase” purchases. Interest is charged to the debt only at the end of the billing cycle.

Unless you continue to pay on time, your annual membership fee will not change. At this point, your credit card company will send you a letter with a new penalty / overdue interest.

Floating rates may vary depending on national interest rates and other economic factors. For example, it may change in response to a significant Fed interest rate change published in The Wall Street Journal.

See your contract or credit card statement for variable and fixed APR values.

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Calculate the daily repeat rate (DPR). Credit card companies usually calculate the interest you charge each month. Due to the variety of days in a month (for example, 31 days in January and 28 days in February), most credit card companies use the DPR formula to calculate interest. To calculate the DPR, divide the APR by 365 (days of the year).

For example, for a fixed or variable 19% APR: 19365 = 0.052. This is the DPR value.

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Multiply this number by the number of days this month. Next, you need to multiply the DPR by 31 in January. 0.052x 31 = 1.61. This means that the interest on the January invoice is 1.61%. In February, multiply the DPR by 28 (0.052 x 28 = 1.46). This means that your account interest rate in February is 1.46%.

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Multiply the interest on your account by the remaining balance. Please note that if you pay in full by the due date, you will not be charged any interest. However, if you pay the minimum or less than the full amount, you will be charged interest on your invoice for the month. Shifts the decimal point to the left twice to convert the interest rate to decimal. Therefore, the interest rate of 1.61% in January will be 0.0161 and the interest rate of 1.46% in February will be 0.0146.

If your card payment is IDR 13,330,000 in the payment cycle at the end of January, you will need to pay IDR 13,330,000×0.0161 or IDR214,613. ――――

If your card balance at the end of the February billing period is IDR 13,330,000, you will need to pay IDR 13,330,000 x IDR 0.0146 or IDR 194,618.

Fine / annual interest rate calculation Default interest rate

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Know what the annual penalty / default interest rate is. This interest rate is higher than the interest rate you earn when you sign up for credit card ownership. This benefit is valid if you violate the contract penalty conditions. Examples of such violations are purchases that exceed the balance sheet and monthly bills that are constantly delayed.

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Select an annual / basic interest rate penalty. The default APR base penalty / interest rate is stated on the contract or monthly invoice. In most cases, the bank will send you a letter explaining the change in interest rates. The 2009 Credit Card Liability and Liability Statement, or Credit Card Act, requires banks to issue notices 45 days prior to adjusting interest on their accounts. Your bank will explain the new interest rate in a letter.

For example, the annual interest rate can be 20%. However, payments were delayed and doubled. 60 days. You will receive a letter from your credit card company informing you that you are raising your monthly interest rate to 35% due to default / negligence.

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Calculate the DPR of a new man. Divide this new interest by 365, which is the number of days in a year. In this example, the calculation is 35 365 = 0.0958. This is the interest you have to pay every day.

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Find the interest rate for the month. The number of days in a month varies, so make sure you’re using the correct number for the month you’re calculating. January is 31st, so multiply by 0.0958×31 to get 2.97. Interest in January is 2.97% of the account for that month.

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Multiply your monthly interest by your total outstanding debt. Remember to convert percentages to decimals. In this example, 2.97% is 0.0297.

If the total debt of the credit card at the end of January is IDR 13,330,000, the interest is only IDR 13,330,000 x 0.0297 or IDR 395,901.

Calculate annual interest

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Understand the APR class or how the APR class works. In the APR category, credit card companies charge different interest rates on different parts of the invoice. For example, 17% for banknotes up to 13.330.000 rupees and 19% for banknotes above 13.330.000 rupees. If the total bill is 19,995,000 rupees, you will have to pay 17% interest of 13,330,000 rupees and the remaining 19% of 6,665,000 rupees.

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Calculate the DPR value for each level. At the end of the billing cycle, check the tiers that apply to your total billing amount. You need to know the DPR value for each of these benefits. for example:

17365 will generate a DPR value of 0.047 for the first IDR 13,330,000 on the invoice.

19365 is the remaining Rp. Generates a DPR value of 0.052 for 6665,000.

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Each DPR is multiplied by the number of days in the month. The calculation method is the same for both fixed and variable interest rates. But don’t forget to apply each step to each level. Suppose you want to calculate the monthly interest for January, which has 31 days.

0.047 x 31 = Monthly interest of 1.457% for the first IDR 1,330,000.

0.052 x 31 = 1.612% monthly interest of the remaining 6,655,000 rupees.

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Calculate the interest paid on the total invoice. Again, move the decimal point 2 points to the left and convert it to a number that can be multiplied by a percentage.

13.330.000,-x 0.01457 = Rs 194.218.1,-Interest paid on the first 1.330.000 rupees on the invoice

6,665,000 x IDR 0.01612 = IDR 107,439.8 of interest paid on the remaining IDR 6,665,000.

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Add the two results to get the total value. Interest paid on the total billed amount of IDR194.218.1-+ IDR107.439.8 = IDR 301.657.9,-IDR 19.995.000

Calculation of APR interest on cash withdrawals

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Understand the annual interest rate of cash withdrawals. Interest on this can be higher than normal annual interest, but it is very different from interest on purchases. Interest is only calculated as an annual percentage of product purchases at the end of each billing cycle. However, for cash withdrawals, interest will be charged “daily” until the debt is repaid. Prepaid interest in cash applies if you do any of the following:

Use your credit card to withdraw cash at an ATM or bank branch.

Send money from your credit card to your overdraft account.

Write a check funded by credit card.

Use your credit card to buy foreign currency.

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Review your invoice and statement to determine the annual rate of cash withdrawals. You may have to deliberately stare to read lowercase letters, but that’s true.

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Calculate the DPR. This is the interest you have to pay every day. To calculate this, divide the annual cash withdrawal rate by 365 days. For example, if your cash withdrawal has an APR of 20%, complete the following calculation. 20365 = 0.055

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Finally, count the number of days you have to wait for your cash withdrawal to be paid. Multiply the number in the previous step by the number of days before. Therefore, if you wait 30 days before withdrawing cash at an annual rate of 20%, the calculation will be 0.055 x 30 (days) = 1.65. Interest on cash withdrawals is 1.65%.

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Calculate the interest you are paying. Multiply the interest from the previous step by the withdrawal amount. In the above example, if you pull out IDR 13,330,000, the calculation will be 13,330,000 x 0.0165 = 16.50. You will need to pay interest on the cash withdrawal of IDR219.945.

Protect your money

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Get in the habit of paying on time. The slower you pay, the higher the APR set by your credit card company. If you forget to pay, please pay now. The credit card company will immediately report you to the complaints department, even before 30 days have passed. This will hurt your credit score to the extent that it takes a long time to recover. Maintain a high FICO score by proving that you are a trusted borrower.

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Please be careful about rate hikes. By law, credit card issuers are required to notify 45 days in advance if interest on a claim increases. However, I will not explain if you are interested. If you don’t know the explanation, contact your credit card company to find out why your card was changed. If they don’t give you a good answer, you may need to transfer your balance to another credit card.

A reasonable reason for an increase in interest is sustained or bankruptcy or a low credit score.

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Please lower the annual rate. Credit card companies make money. They don’t want to lower your APR just because you are a good customer. If you want to cover the amount you paid for years, contact your credit card company and ask them to change the interest rate on your invoice.

Before contacting them, look for a fair and reasonable annual rate value for your FICO score.

Then contact them to renegotiate the APR based on the result of the reset.

If your credit card company doesn’t want it, move your balance to another credit card right away.

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