working out interest on credit cards

irishblue

Hello- this is my first post so bare with me.

I am trying to understand how interest is worked out on a credit card that has 35% APR? say i was to use 300 but paid 100 back on time, then planned to pay the rest the following month. What would be the interest and how would i work it out?

Also regarding cash credit card withdrawals which im aware is best avoided. How do i work out interest on those? say its again 35% interest rate and i take out £40 and dont repay it for 60 days.how would i work it out?

Thanks

I just want to be able to understand all the fine print.

The_Boss

irishblue wrote: »

Hello- this is my first post so bare with me.

Sorry, I'd prefer to keep my clothes on.

grumbler

irishblue wrote: »

..35% APR? say i was to use 300 but paid 100 back on time, then planned to pay the rest the following month. What would be the interest and how would i work it out?

35% APR means 2.53% monthly or 0.082% daily.

You will pay daily interest on each transaction from the day you make it until £100 is credited to your account, then 2.53% on the remaining £200.

katejo

grumbler wrote: »

then 2.35% on the remaining £200.

No it will be 2.35% on the whole £300! If you don't clear the balance completely, ie pay £300 in this case, you will be charged interest on the whole £300 until you pay it off. Also if you then use the card again, you will be charged interest on the new purchases straight away.

grumbler

katejo wrote: »

No it will be 2.35% on the whole £300! If you don't clear the balance completely, ie pay £300 in this case, you will be charged interest on the whole £300 until you pay it off.

If you read my post again and more thoroughly this time, you will see that I said the same, but more accurately.

irishblue

ok thanks. so am i right thinking it would be £7.59 interest on the whole amount?

guesswho2000

irishblue wrote: »

ok thanks. so am i right thinking it would be £7.59 interest on the whole amount?

In the region of that amount, yes.

cockmad

As a general rule, if you know in advance that you are not going to pay off the credit card in full, then you should send your partial payment, in your case, £100 as soon as you receive your statement online rather than in the post.

It will save you a little in interest.

irishblue

thanks everyone