How to calculate interest on credit card amount?

My credit card interest rate is 19.5% And I wanted to know how do you calculate that for example on a 2000.00 amount oweing that’s overdue?

By | 2013-08-26T13:18:58+00:00 August 26th, 2013|Mortgages Home Loans Interest Rate|2 Comments

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  1. DONALD M August 26, 2013 at 2:42 PM - Reply

    The daily rate would be 19.5 divided by 100 (makes the 19.5 percent a real percent and then divide that by 365 the number of days in a week.
    That gives .000534 as a multiplier for the interest due each day or for 30 days it is $32.05.
    Or about $1.07 a day
    That is simple interest.
    If it is compounded – That is if it is calculated each day then the interest charge for the first day is 2000 times .000534 or $1.068
    Day 2 is $2001.068 times .000534 or $1.06857
    Day 3 is $2002.13657 times .000534 or $1.0691

    Going to day 30 it would be 33.38 for the months’ interest.

    At the start of th next month the amount due is 2032.05 and the interest calculates on that total NOT the original 2000. Look at your bill the daily interest charge should be printed.

    Read the Agreement carefully.
    This is assuming no payment was made during the month.
    If payments are made then the payment is deducted from the original amount adding the interest due from day 1 to the payment date.
    ALSO, If you do not pay all of the bill the first month and have a balance interest is added even if you pay what the bill says is due.
    CC companies say interest is owed because you carried over an amount.

  2. mike b August 26, 2013 at 2:16 PM - Reply

    If you multiply $2000 by 19.5 % you get $390. If you divide $390 by 12 (months per year) you get $32.50. You will be paying $32.50 per month in interest alone. Everything above that amount should go to your principal balance. For example, if you make a payment this month of $100 you will be paying $32.50 in interest and $67.50 in principal. That means that your balance for the next month will be around $1932.50. Hope that helps.

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