1. What is the Credit Card Rate Comparison?

The Credit Card Rate Comparison Calculator helps you understand how different annual percentage rates (APRs) affect your monthly interest payments when carrying a balance on different credit cards.

2. How Does the Calculator Work?

The calculator uses the simple interest formula for each card:

Where:

• \( I \) — Monthly interest payment
• \( P \) — Principal balance (amount carried)
• \( R \) — Monthly interest rate (APR ÷ 12)

Explanation: The calculator converts each card's APR to a monthly rate, then multiplies by your balance to show what you'd pay in interest each month.

3. Importance of Rate Comparison

Details: Comparing interest rates helps you understand which cards cost more to carry balances on, allowing you to prioritize paying off higher-rate cards first.

4. Using the Calculator

Tips: Enter your current credit card balance and the APRs for up to three cards. The calculator will show the monthly interest for each card.

5. Frequently Asked Questions (FAQ)

Q1: Why compare credit card rates?
A: Even small APR differences can lead to significant savings when carrying balances over time.

Q2: Does this include compounding interest?
A: This shows simple monthly interest. Actual charges may compound if you don't pay in full.

Q3: What's a good credit card APR?
A: As of 2023, average APRs range from 15-25%. Rates below 15% are generally good.

Q4: Should I only consider APR when choosing cards?
A: No, also consider rewards, fees, and benefits - but APR matters if you carry balances.

Q5: How can I lower my credit card interest?
A: Pay balances in full, negotiate lower rates, transfer balances to lower-rate cards, or consolidate debt.