Online Credit Card Calculator – Credit Card Debt Repayment Calculator
Calculating credit card interest can be very tricky for most people. These are only indicative figures. Actual data may differ because
1. Many credit card companies start charging interest from the date of purchase, not the bill date.
2. Most credit card companies calculate interest based on the declining average daily balance. This means that they calculate the outstanding amount at the end of each day and calculate the applicable interest. If you have an outstanding of Rs. 1 Lakh on the 1st of the month and you make a payment of Rs. 10,000 on the 10th of the month than when you receive the invoice on the 1st of the following month – they would have charged you interest on ((1 , 00,000 * 10 (days of interest)) + (80,000 * 20 (days of interest)) / 30 days = Rs. 86,667 declining average daily balance. So if your monthly interest rate is 1.5 %, your next billing cycle amount will be Rs. 81,300.
3. This does not include taxes on interest charged by credit card companies.
4. If you have additional purchases during the current month, this will also be part of your average daily declining balance. So suppose in the previous example you made an additional purchase of Rs. 15,000 on the 15th of the month. You will be charged interest on (1,00,000 * 10 (days of interest)) + 80,000 * 5 (days of interest) +95,000 * 15) / 30 days = Rs. 94,167 average daily reducing balance. With a monthly interest rate of 1.5%, your next statement will be Rs. 96,413.
Tip – if you are behind on your credit card payment, you should make the payment to the credit card companies as soon as you have cash on hand. Even if you haven’t received next month’s credit card statement. This is applicable even if you missed the payment of Rs100 in the Rs100000 invoice. You will have to pay interest on the Rs already paid. Also 99,900.