1. What is the Finance Charge Calculation?

The finance charge calculation determines the monthly interest you'll pay on your BPI credit card balance. It's based on your principal balance and the annual percentage rate (APR) of your card.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( I \) — Monthly finance charge (PHP)
• \( P \) — Principal balance (PHP)
• \( R \) — Monthly interest rate (APR / 12 as decimal)

Explanation: The formula calculates the interest by multiplying the outstanding balance by the monthly interest rate (annual rate divided by 12).

3. Importance of Finance Charge Calculation

Details: Understanding your monthly finance charge helps in budgeting and making informed decisions about credit card payments and debt management.

4. Using the Calculator

Tips: Enter your current credit card balance in PHP and the annual percentage rate (APR) of your BPI credit card. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is APR different from interest rate?
A: APR includes both the interest rate and any additional fees charged by the credit card company, giving a more complete picture of borrowing costs.

Q2: Does BPI charge interest if I pay my full balance?
A: No, if you pay your statement balance in full by the due date, you typically won't incur finance charges.

Q3: How can I reduce my finance charges?
A: Pay more than the minimum payment, pay early in the billing cycle, or consider balance transfer to a lower-rate card.

Q4: Is this calculation accurate for all BPI credit cards?
A: This provides an estimate. Some BPI cards may have different terms or promotional rates. Always check your cardholder agreement.

Q5: Does this include other fees like late payment charges?
A: No, this calculates only the monthly interest charge. Late fees and other charges would be additional.