I have a credit card that has various rates for different transactions. For example, Purchases are 29.99%, Promotions could be 9.99% or 4.99% and there are different balances on all of them.
The credit card company comes back with an Effective Annual Percentage Rate of 19.55%.
How do you figure out this number? Is it like a weighted average?
I know if you have $5000 at 20% and $1000 at 10% on the same card, the combined interest rate will not be 15% because you have the majority of the money at 20%, so it will be higher than 15%.