Step 1: Find your current APR and current balance in your credit card statement.
1 PERIODIC BACK IN FOCUS HOW TO
How to calculate your monthly APRĬalculating your monthly APR rate can be done in three easy steps:
You'll know which rates are associated with your credit card by checking your card member agreement and monthly credit card statements. Promotional rates include zero-interest or low-interest periods offered as introductory incentives by credit card companies. Variable rates may increase or decrease depending on federal rates. With fixed rates, your APR is likely to stay the same throughout the time you carry your card unless otherwise stated. The three main types of APR are fixed rate, variable rate, and promotional rate. If you are carrying a credit card balance, you will be charged APR interest at a rate that is calculated and determined by your credit card issuer. Will I have to pay Annual Percentage Rate charges? Monthly APR can also help you understand how much it is costing you to carry a balance each month that you are not paying down the entire balance.īelow, you will find steps and formulas for calculating both your daily and monthly percentage rates, which are based on your APR, and how they are applied to your balances. This information could help you make decisions about which credit cards you may want to focus on paying down quickly (if they are costing you too much in daily interest) and how much it is costing you each day to borrow from your credit card company. Your monthly statement may break down your APR yearly or monthly on your monthly statement, but you can break it down to a monthly APR yourself. By figuring out the daily periodic rate on your credit cards, you can have a better understanding of how compound interest is affecting how much you're paying back in interest. Your credit card's Annual Percentage Rate is the interest rate you are charged on any unpaid credit card balances you have every month. Understanding how your credit card's Annual Percentage Rate (APR) is calculated and applied to your outstanding balances is crucial to maintaining control over the growth of your overall credit card debt.
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