1. What is Credit Card Interest Comparison?

This calculator compares the monthly interest charges across multiple credit cards based on their principal balances and annual percentage rates (APRs). Understanding these differences can help prioritize debt repayment strategies.

2. How Does the Calculator Work?

The calculator uses the credit card interest formula:

Where:

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

Explanation: The equation calculates the monthly interest charge for each card by converting the APR to a monthly rate and multiplying by the outstanding balance.

3. Importance of Interest Comparison

Details: Comparing interest charges helps identify which debts are costing you the most, allowing you to prioritize repayment of high-interest cards first (debt avalanche method).

4. Using the Calculator

Tips: Enter the current balance and APR for each card you want to compare. At least one card is required. Results show the monthly interest charge for each card entered.

5. Frequently Asked Questions (FAQ)

Q1: Why compare credit card interest?
A: It helps identify which cards are costing you the most in interest charges, allowing you to prioritize repayment strategically.

Q2: What's the difference between APR and interest rate?
A: APR includes both the interest rate and any fees, giving a more complete picture of borrowing costs.

Q3: How can I reduce my credit card interest?
A: Pay more than the minimum, target highest APR cards first, consider balance transfers to lower-rate cards, or negotiate with your issuer.

Q4: Does this include compound interest?
A: This shows simple monthly interest. Actual charges may compound if you don't pay in full each month.

Q5: What if I make payments during the month?
A: This calculator assumes no payments. For more precise calculations with payments, use an amortization calculator.