1. What is Credit Card Interest?

Credit card interest is the amount charged by credit card companies for borrowing money. It's calculated based on your principal balance and the annual percentage rate (APR) of your card.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( I \) — Monthly interest (Rs)
• \( P \) — Principal balance (Rs)
• \( R \) — Monthly interest rate (annual rate / 12, as decimal)

Explanation: The formula calculates the 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 in debt management, budgeting, and making informed decisions about payments and balance transfers.

4. Using the Calculator

Tips: Enter your current credit card balance in Rs and your card's annual interest rate (APR). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this the actual interest I'll pay?
A: This is a simplified calculation. Actual interest may vary based on daily compounding, grace periods, and payment timing.

Q2: How can I reduce my credit card interest?
A: Pay more than the minimum payment, pay early in the billing cycle, or consider balance transfers to lower-rate cards.

Q3: What's a typical credit card interest rate?
A: Rates typically range from 12% to 25% APR depending on creditworthiness and card type.

Q4: Does this include fees?
A: No, this calculates interest only. Additional fees may apply to your account.

Q5: How is daily compounding different?
A: Most cards compound daily, which would slightly increase the interest compared to this monthly calculation.