1. What is the Credit Card Total Cost?

The total cost of credit card debt includes the principal amount borrowed plus all interest and fees paid over the repayment period. Understanding this helps consumers make informed decisions about borrowing.

2. How Does the Calculator Work?

The calculator uses the equation:

Where:

• \( P \) — Principal amount ($)
• \( R \) — Annual interest rate (decimal)
• \( T \) — Time period (years)
• \( F \) — Total fees ($)
• \( I \) — Total interest ($)

Explanation: The equation calculates simple interest on the principal amount and adds any additional fees to determine the complete cost of borrowing.

3. Importance of Total Cost Calculation

Details: Knowing the total repayment amount helps compare credit options and understand the true cost of debt beyond just the interest rate.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate (as percentage), repayment period in years, and any additional fees. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this calculator use simple or compound interest?
A: This uses simple interest calculation. For compound interest (more common with credit cards), see our compound interest calculator.

Q2: What fees should I include?
A: Include all known fees - annual fees, balance transfer fees, late payment fees, etc.

Q3: How accurate is this calculation?
A: This provides an estimate. Actual costs may vary with payment timing, compounding frequency, and changing rates.

Q4: Why is my total cost much higher than the principal?
A: High interest rates and long repayment periods dramatically increase total costs. This shows why paying off debt quickly is important.

Q5: Can I use this for other loans?
A: Yes, for any simple interest loan. For mortgages or auto loans with amortization, use specialized calculators.