How To Calculate Credit Card – As a user of a credit card, some of you may have the right not to make payment in full. If so, surely you will incur interest on your next Bill. Actually, how banks calculate such interest?
A credit card is like a loan. So when you make purchases with a credit card, then you also like lent some money to a number of values that are done the spending. Later, the bank will charge a fee for the use of that money – a term known is the flower.
Actually, you can be free from the burden of fees or interest. Provided that, you pay the Bill in full before the payment due date already specified. However, it means free of cost at all. Of cause, you will be charged postage labels for payments made.
Understand The Provisions
Different when in a condition You cannot pay off all the Bills. You will be charged interest on the amount of the remaining Bills. And for this, the interest rate of each card are usually different. Because, partly account for the grace period, while some others are starting to charge interest from the date of the transaction or the transaction when the mouse-button in the system. In fact, there are also charge interest starting from the date of billing.
That’s why you must understand the terms and policies of the credit cards you have. If necessary, ask for clear details. Because, unlike other loans, credit card interest be calculated on a daily basis or monthly basis.
Each bank will also impose interest on transactions for purchases that will be charged with several conditions.
- You do not make payment at maturity
- Make a payment of less than the total credit card bills (payment in full)
- Full payment after the due date of payment
Then, how credit card interest rate actually counted it?
There’s a formula for doing the calculations, namely;
[Interest rates per year (%) x daily balance]: 365 days
- The number of days in 1 year: 365 days
- Daily balance = balance payable on that day
- Calculated for periods of 1-month billing
How The Illustrations?
For example, you have a delinquent principal amounting to Rp 1 million, 3% interest per month or per year 36%
Then, [36% x $1 million]: 365 days = $986.30
So, interest will be charged to You is $29,589.04 per month
If there are late fees, cost of postage labels, and other costs as the interest calculation. So, when the next month’s Bill Staples of Your delinquent registration $500,000, then the calculation of the interest will also be using the same calculation.
So, with the new regulations, then this means that the bank does not include interest, fees, and fines owed as the components of the calculation interest rate credit card.
Some say, try to use the formula 20:10 to understand how the amount of debt that is able to pay. The number 20 is never borrowed more than 20% of your annual net income, and number 10 refers to the monthly bills may not exceed 10% of the monthly net income.
So, how? Ready to recalculate the amount of your credit card bills?