Credit card interest - basic question

glasgowsaver2011

Probably a really simple question.

I have a credit card (closed, I just pay a few hundred towards the balance every month)

18.9% APR

Is it as simple as saying

for each £100 on the balance of your credit card, you will be charged £1 per month interest?

stephane_2

http://www.ehow.com/how_4743602_calculate-credit-card-using-apr.html

chris-j

http://www.stoozing.com/mon2yr.htm

works out for you

chattychappy

glasgowsaver2011 wrote: »

Probably a really simple question.

I have a credit card (closed, I just pay a few hundred towards the balance every month)

18.9% APR

Is it as simple as saying

for each £100 on the balance of your credit card, you will be charged £1 per month interest?

It means that for each £100 of balance held at the start of the year, you would be charged £18.90 interest by the end of the year. (Assuming nothing paid back.)

Roughly this would be 18.90/12 per month, ie around £1.50 per month. It isn't exactly that, because the balance rises monthly, which means that the interest applied rises too. It would be a little less in the early months (when the balance is nearer £100) and a little more in the later months as the balance increases.

I make it £1.45 for a month when the balance is £100.