There are many ways to calculate personal credit card interest rates. Today’s article we will introduce you to some credit card calculator methods.
In the previous post, Info Credit Free introduces people to some of the necessary information that is useful for getting the credit cards for no credit in the US, to get more information people can read the article Three ADVANTAGES of the credit cards for no credit. Now, let find knowledge about the credit card calculator in the post today.
CREDIT CARD CALCULATOR
Just like a lot of article posts such as credit cards for people with bad credit, best credit cards for students, best business credit cards, best-secured credit card…, this post about credit card calculator also includes some main parts. They are:
1. Credit card calculator with an average daily balance method
The most widely used credit card issuance method to use to calculate monthly interest is the daily average balance or ADB method. Because the months are of different lengths, credit card issuers use daily interest rates or DPR to charge interest rates. DPR is calculated by dividing the APR for 365, which is the number of days in a year.
Then find ADB. This search equation is a bit more tedious, but just add up all the balances for each day in the statement payment cycle and divide it by the total number of days in the payment cycle.
Finally, multiply this number by the Daily Periodic Rate calculated before it and the number of days in the payment cycle to determine the interest for the statement of that month.
Payment of monthly interest = DPR × ADB × number of days in the payment cycle
For example, you need help in calculating interest payments for one of his credit cards in June. It carries APR 15%. Calculate your DPR by the above equation:
DPR = 0.15 / 365 = 0.00041
During the first 15 days of the June payment cycle, there is a $ 500 balance. In the middle of the month, You paid $ 100, so the remaining 15 days had a balance of $ 400. Calculate his ADB using the above equation:
ADB = (15 × 500 + 15 × 400) / 30 = $ 450
Multiply DPR, ADB, and number of days in the payment cycle to find monthly interest payments:
Monthly interest payment = 0,00041 × 450 × 30 = $ 5.54
Your interest payment in June was $ 5.54.
There are several other ways that credit card issuers calculate monthly interest payments, including the previous balance method and the adjusted balance method, although they do not use it all regularly.
2. Credit card calculator with a previous balance method
Multiply DPR by the previous month’s balance with the number of days in the payment cycle. Suppose your balance at the end of last month is $ 300:
Monthly interest payment = 0,00041 × 300 × 30 = $ 3.69
3. The credit card calculator with balance adjustment method
Multiply DPR by the adjusted balance, the balance of the previous month has less payment. Then multiply that result by the number of days in the payment cycle. Suppose Jon’s balance in May is $ 300 but he paid a total of $ 200:
Monthly interest payment = 0,00041 × (300 – 200) × 30 = $ 1.23
Calculating monthly payments will cause suppliers to charge a minimum payment fee, mostly for interest payments. It is important to make this payment. Failure to do so may result in card cancellation, proceedings and reduced credit ratings of the owner.
Unless the credit card has zero, or low, referral, APR, interest is paid on a fairly high balance. APR credit cards average about 20%, relatively high for any loan. Good APR averages about 8-12%, although people with excellent credit can get even lower rates.
This is because credit card debt is not guaranteed, meaning there is no collateral to support the loan. If the borrower defaults, the lender cannot seize any assets and this risk is reflected in high-interest rates. Secured debt in comparison requires collateral, such as real estate. If the borrower defaults on secured debt, the lender can confiscate and possess the property.
This post is about the Credit card calculator. We provide this information to offer you some of the necessary information that is useful for getting the Credit card calculator. Also if you are looking for ways to get the credit cards for people with bad credit, please refer to Two types of credit cards for people with bad credit link we just provided in the previous article.
Hillary (Team Content) – Info Credit Free