The easiest way to calculate Credit Card interest is by using the APR. By comparing APR, you can find the best Credit Card for your own uses. Different APRs apply to different uses such as, cash withdrawals, balance transfers and purchases. If you intend to use your Credit Card primarily for purchases, then you will want to look for the lowest APR on purchases.
Monthly or daily interest rates are also used by companies to calculate the interest on outstanding balances.
- If your Credit Card has an APR of 40.2% you can calculate the daily interest rate by dividing 40.2% by 365. This gives you a daily APR of 0.11%
- If you had an outstanding balance of Rs. 1000 on your Card you would be charged Rs. 33.04 in interest. This is calculated as taking the APR of 0.11% times the monthly billing days (30)
- The more of your outstanding balance you repay each month, the less interest your Credit Card will accrue.