Comparing interest rates

tafkam

We have recently come into some money, and would like to use it to pay off some credit card debts.
Just trying to work out which has the highest interest rate, but is there an easy way of converting the monthly interest rate which appears on the bill to a comparable annual rate?

CLAPTON

a reasonable approximation is to multiply by 13 .. not exact but good enough for most purposes

thesaint

tafkam wrote:

We have recently come into some money, and would like to use it to pay off some credit card debts.
Just trying to work out which has the highest interest rate, but is there an easy way of converting the monthly interest rate which appears on the bill to a comparable annual rate?

Call the relevant credit card companies and ask them, there is a complicated formula that they use depending on the number of months in the given year. CLAPTON's formula is rather simplistic and sometimes can be out by the factor of 1.

watcherman

This is one that I have saved, I believe from a thread here.

To convert monthly interest to annual interest use Excel, copy and paste this into cell A2, and then enter the monthly interest rate in to cell A1

=(((((A1/100)+1)^12)-1)*100)

PBA

Not wanting to sound like I'm insulting your intelligence here, but of course the one with the highest monthly interest rate would therefore also be the one with the highest annual interest rate.

highguyuk

tafkam wrote:

We have recently come into some money, and would like to use it to pay off some credit card debts.
Just trying to work out which has the highest interest rate, but is there an easy way of converting the monthly interest rate which appears on the bill to a comparable annual rate?

Ring up and ask!

And whilst your at it, ask them to reduce it! lol.