How Credit Card Interest Works - The Calculation Explained
from Sasha Yanshin Hosted by Sasha Yanshin
Do you understand how your credit card company calculates interest and exactly how the APR or annual interest rate is used on your monthly statements?In this video I go through the exact way that credit cards calculate interest, how it applies to your balance and the key mathematical calculations you will need to make if you want to figure out your monthly statement interest cost.The way credit card interest is calculated in the UK is different to the United States and I explain this in detail - the way the annual interest or APR is converted into the monthly equivalent is different as the US credit card industry uses simple annual interest rates and the UK uses compound interest rates.If this all sounds a little complicated, I do my best to explain it as simply as possible in the video.Make sure you remember that different balance types have to have their interest calculated individually before you add them all up to the total interest due at the end of the month.
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