1. What is Credit Card Interest?

Credit card interest is the amount charged by credit card companies for carrying a balance. It's calculated based on your principal balance and the annual percentage rate (APR) of your card.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

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

Explanation: The formula calculates the interest charged for one month based on your current balance and the card's APR.

3. Importance of Interest Calculation

Details: Understanding how interest is calculated helps you make informed decisions about paying off credit card debt and comparing different card offers.

4. Using the Calculator

Tips: Enter your current credit card balance in Rs and the annual percentage rate (APR) of your card. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often is credit card interest calculated?
A: Most credit cards calculate interest daily but charge it monthly based on your average daily balance.

Q2: Can I avoid paying interest?
A: Yes, by paying your full statement balance by the due date each month.

Q3: Why is my actual interest slightly different?
A: This calculator uses simple interest. Actual cards may use average daily balance method with daily compounding.

Q4: What's a typical credit card interest rate?
A: Rates vary but typically range from 15% to 25% APR depending on creditworthiness and card type.

Q5: How can I reduce my interest payments?
A: Pay more than the minimum, pay on time, consider balance transfers to lower-rate cards, or negotiate with your issuer.