Compare Credit Card Rate Calculator

Credit Card Interest Formula:

\[ I = P \times R \]

Where for each card:

P: Principal balance (currency unit)

R: Monthly interest rate (APR / 12, as decimal)

I: Monthly interest (currency unit)

Card 1 Balance:

Card 1 APR:

Card 2 Balance:

Card 2 APR:

Card 1 Monthly Interest:

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1. What is Credit Card Interest Comparison?

This calculator compares monthly interest charges between different credit cards based on their balances and APRs. Understanding these differences helps prioritize which debts to pay first.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

\[ Monthly\ Interest = Balance \times \left(\frac{APR}{12}\right) \]

Where:

Balance — Current amount owed on the card
APR — Annual Percentage Rate (as percentage)
Monthly Interest — Amount added to balance each month

3. Importance of Comparing Interest

Details: Comparing interest charges helps identify which debts are costing you the most, allowing you to make strategic decisions about debt repayment.

4. Using the Calculator

Tips: Enter at least one card's balance and APR. For comparison, enter a second card's details. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I always pay off the highest APR card first?
A: Generally yes (avalanche method), but some prefer paying smallest balances first (snowball method) for psychological wins.

Q2: Does this include compound interest?
A: This shows simple monthly interest. Actual charges may compound if you don't pay in full.

Q3: What if my APR changes?
A: Recalculate with the new rate. Many cards have variable APRs.

Q4: How can I reduce these interest charges?
A: Pay more than minimums, negotiate lower rates, or transfer balances to 0% APR cards.

Q5: Why compare monthly instead of annual interest?
A: Credit card interest typically compounds monthly, making the monthly rate most relevant for budgeting.