1. What is Monthly Credit Card Interest?

Monthly credit card interest is the amount charged by credit card companies on outstanding balances. It's calculated using your principal balance and the monthly periodic rate (APR divided by 12).

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

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

Explanation: The formula calculates how much interest you'll pay each month based on your current balance and annual percentage rate.

3. Importance of APR Calculation

Details: Understanding your monthly interest helps with budgeting and demonstrates the cost of carrying a credit card balance. High APRs can significantly increase debt over time.

4. Using the Calculator

Tips: Enter your current credit card balance in Rs and the annual percentage rate (APR). The calculator will show your estimated monthly interest charge.

5. Frequently Asked Questions (FAQ)

Q1: How is APR different from interest rate?
A: APR includes both the interest rate and any additional fees, giving a more complete picture of borrowing costs.

Q2: Why is my monthly interest sometimes higher than calculated?
A: Some cards use daily periodic rates or compound interest, which can increase charges. This calculator provides a simple estimate.

Q3: How can I reduce my monthly interest payments?
A: Paying more than the minimum payment or transferring to a lower APR card can reduce interest costs.

Q4: Does this include compound interest?
A: No, this is a simple interest calculation. Actual credit card interest may compound daily.

Q5: What's a good APR for a credit card?
A: Rates vary, but generally below 15% is good. Excellent credit can qualify for rates under 12%.