1. What is Credit Card Interest?

Credit card interest is the cost of borrowing money on your credit card. When you carry a balance, the credit card company charges interest based on your annual percentage rate (APR) and your outstanding balance.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

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

The result is then converted to Philippine Peso (PHP) using the current exchange rate.

3. Importance of Interest Calculation

Details: Understanding how much interest you're paying helps with financial planning, debt repayment strategies, and evaluating the true cost of credit card purchases.

4. Using the Calculator

Tips: Enter your current credit card balance in USD, your APR (found on your statement), and the current USD to PHP exchange rate. The calculator will show both the USD and PHP equivalent of your monthly interest.

5. Frequently Asked Questions (FAQ)

Q1: How often is interest charged on credit cards?
A: Interest is typically calculated daily but charged monthly based on your average daily balance.

Q2: What's a typical credit card APR?
A: APRs vary but often range from 15% to 25% annually, depending on the card and your creditworthiness.

Q3: How can I reduce my credit card interest?
A: Pay your balance in full each month, negotiate a lower APR, or transfer balances to a lower-interest card.

Q4: Why convert to PHP?
A: This helps Filipino users understand the peso equivalent of their USD-denominated credit card interest.

Q5: Where can I find the current exchange rate?
A: Check reputable financial websites or your bank's foreign exchange page for current rates.