How many days are there in a credit card interest month?

rich86

Hi,

I'm sorry to post again but after spending the day talking to different credit card companies who don't seem to even understand my question I'm hoping someone can quickly clarify:

Interest on Cash Balance: 2.075% (0.63)
Interest on Standard Balance: 1.667% (6.13)

Those interest rates are for a standard month. Since their is no such thing how do the credit card companies divide say the 2.075% on a daily basis so that they can charge a daily rate?

My cash balance on that account is £30 so:
(CashBalance/100)*(CashMonthlyInterest/DaysInAverageMonth)*DaysAtThatBalance

should equal my interest due for that period right?

So my previous statement was 5th July and my current one is 6th August so I assume 5th of July is excluded as thats covered by the previous statement? So 6th July to 6th August inclusive equals 32 days therefore it should work out as:

(30/100)*(2.075/MagicNumberOfDays)*32Days
=My interest for that period

Please please someone tell me if thats completely wrong or correct and what this magical number is?

Thankyou for your help!
Rich

wannabedebtfree_2

I think you're getting a bit confused, although I could be wrong too!

It would just be £30 x 2.075% if it was for the whole month, however if it was for only say 15 days, then you would divide the interest by the number of days in that month, and then times it by the 15.

The 2.075% is already monthly, so unless you are only being charged for a part month then you don't need to divide it by anything.

wannabedebtfree_2

I have just calculated that 2.075% of £30 would be 62p, so it sounds right to me.

rich86

I know that amount will be roughly correct but would like to calculate it accurately the 2.075% a monthly interest rate but they apply the interest on a day to day basis. I can't just divide it by 30 or 31 because there is no such thing as a standard month maybe I'm talking rubbish but they must do something similar to calculate it?

dzug

It will depend on that particular month. You should be able to work out how many days depending on the interval between your statement and/or payment dates

rich86

yeah I understand that I can work out how many days there are in the statement period but still don't know how many days the 2.075% accounts for. Some times a month has 30, 31 or even 28 days but they are still called a month so therefore they must have some way to divide the 2.075% up equally and for that they must have a standard banking month to work out the daily rate.

DesG

2.075*12/365.25

Should give you a daily rate

Cheers, Des.