1. What is Credit Card Interest?

Credit card interest is the amount charged by banks for carrying a balance on your credit card. In the Philippines, interest is typically calculated monthly based on your outstanding balance and annual percentage rate (APR).

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( I \) — Monthly interest (PHP)
• \( P \) — Principal balance (PHP)
• \( R \) — 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 card's APR.

3. Importance of Interest Calculation

Details: Understanding your monthly interest helps with budgeting and shows the true cost of carrying credit card debt, encouraging faster repayment.

4. Using the Calculator

Tips: Enter your current credit card balance in PHP and your card's APR percentage. All values must be valid (balance > 0, APR ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What's the typical APR in the Philippines?
A: Most credit cards in PH have APRs between 24% to 42% annually (2% to 3.5% monthly).

Q2: When is interest charged?
A: Interest is charged when you don't pay your full statement balance by the due date.

Q3: How can I reduce my interest payments?
A: Pay your balance in full each month, or consider balance transfer cards with lower rates.

Q4: Are there other fees besides interest?
A: Yes, late payment fees (PHP 300-1,000) and overlimit fees may apply.

Q5: Does this calculator account for compounding?
A: No, this shows simple monthly interest. Actual charges may compound if unpaid.