The credit card offer the convenience fo us to pay anything we want by a plastic. We go shopping and traveling without worry about carring much money. The simple, easiest way is our fovorite choice. As the consecuency , we have to pay off our credit card bills in the end. There is also the interest as the extra money that will be charged in our account. The interest rate of credit card usually higer than the other loan. It because the credit card is include to the unguarantee loan, so that the credit card company have to take the responsibility for a big risk, just in case we default to pay off our credit card bill.
Let find out how much the the interest that will be in our credit card bill. First, we have to know our daily expenses. For example, from the 1 st to 10 th you have account $ 1.000 and from
11st to 30 you spent $ 250. So, (10 x $ 1.000) + (20x $ 250) = $ 15.000 . So our daily account would be $40.000 devided by 30 is $ 500.
If there is 24 % as the interest rate anually, we have to devided by 12 to get the monthly interest rate : 2 %. It means that 2 devided by 100 is 0.02 multiply with our daily account for a month ($ 500) so we get $ 10 as the interest for that month.
We can calculate our bil : $ 1500 + $ 10 = $ 1510 plus another administration fee.
By knowing the balance and interest rate you can predict your credit card bill. This is the simple method that we have to know before using our credit card. By predicting before using is the way to avoid you from bankruptcy.