How Do You Calculate Interest On Credit Card Balance?
Credit cards offer the convenience of being able to pay for purchases with a piece of plastic without worrying about having sufficient cash or exact change. However, if you do not pay off your credit card in full at the end of the billing statement, you will be charged interest on your account’s balance. The amount of interest will depend on the length of the billing period, the amount you owe and the interest rate on the account. The interest rate charged by credit cards is typically higher than secured loans, because credit cards do not have any collateral securing the loan. As a result, they are riskier for lenders. Multiply the balance of your credit card account by the annual interest rate expressed as a decimal. For example, if you carry a $2,550 balance on a credit card with an interest rate of 17.9 percent, you would multiply $2,550 by 0.179 to get $456.45. Divide the number of days in the billing period by 365 (the number of days per year). For example, if the billing statemen
