1. What is Credit Card APR?

The Annual Percentage Rate (APR) is the interest rate charged on credit card balances over a year. This calculator helps you determine the monthly interest charge based on your current balance and card's APR.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( I \) — Monthly interest charge (Rs)
• \( P \) — Principal balance (Rs)
• \( R \) — Monthly interest rate (Annual APR / 12, as decimal)

Explanation: The APR is divided by 12 to get the monthly rate, then multiplied by your balance to calculate the interest charge.

3. Importance of APR Calculation

Details: Understanding your monthly interest charges helps with budgeting and demonstrates the true cost of carrying a credit card balance.

4. Using the Calculator

Tips: Enter your current credit card balance in Rs and your card's APR percentage. The calculator will show your estimated monthly interest charge.

5. Frequently Asked Questions (FAQ)

Q1: Is this the only charge I'll pay on my credit card?
A: No, this is just the interest charge. You may also have fees, and minimum payments typically include both interest and principal.

Q2: How can I reduce my interest charges?
A: Pay your balance in full each month, negotiate a lower APR, or transfer balances to a lower-rate card.

Q3: Does this calculation work for all credit cards?
A: Most cards use daily compounding, but this simple calculation gives a good estimate for monthly charges.

Q4: What's a good APR for a credit card?
A: Rates vary, but generally under 15% is good for standard cards. Rewards cards often have higher APRs.

Q5: Why is my actual interest sometimes different?
A: Some cards compound daily, and your balance may change during the billing cycle.