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Credit Card Charges Formula:
Where:
\( I \) = Monthly interest (P × R, AUD)
\( F \) = Monthly fees (AUD)
Total Cost = Total cost (AUD)
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This calculator helps Australian consumers understand the total monthly cost of their credit card debt, including both interest charges and fees. It provides transparency about the true cost of maintaining a credit card balance.
The calculator uses the formula:
Where:
Explanation: The equation calculates the combined cost of interest charges and mandatory fees that credit card holders pay each month.
Details: Understanding your total credit card costs helps with budgeting, debt repayment planning, and comparing different credit card products in the Australian market.
Tips: Enter your current outstanding balance, the card's monthly interest rate (found in your statement), and any monthly fees. All values must be in AUD.
Q1: Where can I find my credit card's interest rate?
A: Check your monthly statement or your card's terms and conditions. In Australia, rates typically range from 10% to 24% annually (divide by 12 for monthly rate).
Q2: What fees should I include?
A: Include all mandatory monthly fees like account-keeping fees, but exclude one-time charges or optional insurance premiums.
Q3: How can I reduce my credit card costs?
A: Consider balance transfer offers, negotiating with your bank, or consolidating debt into a personal loan with lower interest.
Q4: Does this calculator account for minimum repayments?
A: No, this shows the cost of maintaining your balance. Making repayments would reduce your principal and subsequent interest.
Q5: Are there Australian regulations about credit card fees?
A: Yes, Australian credit providers must disclose all fees and charges clearly under the National Consumer Credit Protection Act.