How Do You Calculate APR From Credit Card Payments?
All creditors charge interest. The interest you pay on your credit card is dependent upon the annual percentage rate (APR) of your card. You should be able to determine your card’s APR by looking at the documentation for the card or consulting a bank representative, but it is always a good idea to check that you are actually being charged what they say they are charging you. You can calculate your actual APR using the finance charge for one month of credit card activity. Look at your most recent credit card statement. Determine the balance and the interest you were charged on that balance. As an example, imagine that your card had a balance of $350 and you were charged $7 in interest. Figure out what percentage of your total balance you were charged as interest; this is your monthly periodic interest rate. In our example: Interest percentage = $7 / $350 x 100 percent = 2 percent Multiply the monthly periodic interest rate by 12 to obtain the APR for your card. In our example: APR = 2 p
