Credit Card APR Calculator

What is an APR?

APR or Annual Percentage Rate is the interest that usually calculated in the yearly rate. Interest is applied every month until your debt is paid off. Determining your APR for any credit card is as simple as reading through statement is gave to you monthly. You must read the credit card agreement if you really want to understand the calculation which is affected to your credit line.

One card may have different APRs for each feature of the card. It depends on the type and the credit card limit. Not only the interest, your credit card monthly statement also includes the l fee and additional cost in the transaction.

Calculating the APR

The monthly periodic rate is the annual percentage rate divided by 12. The example below shows how the APR affects the cost of credit.

To determine the monthly periodic rate on a yearly APR of 15%:

15% ÷ 12 months = 1.25%

To calculate the finance charge using a monthly periodic rate, multiply:

Average Daily Balance x Monthly Periodic Rate = Monthly Finance Charge

(For this example, $200 is the account balance)

$200 x 1.25% = $2.50

Some cards use a daily periodic rate to calculate the finance charge. To get the daily periodic rate, you divide the APR by the number of days in the year (365).

To determine the daily periodic rate on a yearly APR of 15%:

15% ÷ 365 days = .04%

To calculate the finance charge using a daily periodic rate, multiply:

Average Daily Balance x Daily Periodic Rate x Days in the Cycle = Monthly Finance Charge

(For this example, $200 is the account balance)

$200 x .04% x 30 = $2.4

By knowing the APR calculation make you more wise to analyze the agreement. You may choose the lower of APR, the less fee and monthly administration so,  it is more easy for you to pay off the credit card monthly bill on time.