1. What is Credit Card Interest?

Credit card interest is the amount charged by credit card issuers on outstanding balances. It's calculated based on your annual percentage rate (APR) and the principal balance you carry.

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 a decimal)

Explanation: The formula calculates the interest charged for one month on your outstanding credit card balance.

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 credit card offers.

4. Using the Calculator

Tips: Enter your current credit card balance in Rs and the annual interest rate (APR) in percentage. All 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: What's a typical credit card interest rate?
A: Rates vary but typically range from 15% to 25% APR, depending on your creditworthiness and card type.

Q3: How can I avoid paying interest?
A: Pay your statement balance in full by the due date each month to avoid interest charges.

Q4: Does this calculator account for compound interest?
A: This shows simple monthly interest. Actual credit cards use daily compounding which may result in slightly higher interest.

Q5: What if I make partial payments?
A: This calculator shows interest on the full balance. Partial payments would reduce the principal and thus subsequent interest.