Card Interest Calculation

shonky_2

I'm just trying to work out some numbers, but I can't for the life of me work out how the banks calculate their interest on credit cards. Is it:

(Balance * Monthly Interest Rate) less repayment

OR

((Balance less repayment)) * Monthly Interest Rate)

Thanks

Shonky

smartsaver

Paying interest on credit cards  :o  :o

You need to read this http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1080684075,39998,  ;)







(I modified the link so that it works)

Galstonian

Unfortunately they all do it slightly differently and you need to look at the terms and conditions.

You can have several interest rates charges simultaneoulsy depending on the nature of the transactions, you can have nominal amounts referred to as "standard balance", some deduct charges from your payment and don't charge interest on them, I think some charge on an average daily balance. Deliberately obfuscated and confusing? I for one think so.

Can I ask why you need to know? If you work out an approximation and it is far from what you were charged then you could always ask for a more detailed calculation. Better still, pay off your balance or transfer it onto a 0% offer and don't pay any interest at all.

shonky_2

That link didn't seem to work.

As for paying interest - it is actually for information only!

smartsaver

That link didn't seem to work.

Try coping and pasting the whole link. It worked for me