Understanding the interest calculation of BT/MT credit card.

adindas

Understanding the interest calculation of BT/MT credit card

Say I take £10,000,-  2% Interest p.a Money transfer credit card with 0% fee.

Say In the first month I pay £100 so the balance will be £9,900,-.In the following month is the interest calculated on the basis of £9,900 or £10.000,- ?

Thanks

eskbanker

adindas said:

Say I take £10,000,-  2% Interest p.a Money transfer credit card with 0% fee.

Say In the first month I pay £100 so the balance will be £9,900,-.In the following month is the interest calculated on the basis of £9,900 or £10.000,- ?

The balance won't be £9,900 after month one, because some of your £100 will have been used to settle the interest rather than repaying the balance, but the interest calculation will be based on the daily balance, which will be a mixture of figures depending on how long elapses between statement generation and payment.