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how CC APR works

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  • #1

    how CC APR works

    Hi everyone! This forum has been SO helpful so I am constantly coming back for answers!

    I currently have $1,941.97 on my CC with an APR of 13.99%

    This summer I should be able to pay about $500-600 every 2 weeks towards the bill... with brings it to about $1000-1200 each month.

    Is the 13.99% charged in FULL every month?... meaning I will be paying $200-300 in interest every month?

    I am not too knowledgeable about this stuff and often get confused. I was taught that it's GOOD to carry a balance from month to month (HA!) so I've never been too sure on the APR.

    If anyone could let me know that'd be great! I'd really like to get this debt paid down ASAP so I can start saving (since I graduate college next May, eek!)
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  • #2
    APR = Annual Percentage Rate

    You'll be charged $20-$30 in interest per month.

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    • #3
      Originally posted by sweeps View Post
      APR = Annual Percentage Rate

      You'll be charged $20-$30 in interest per month.
      Thank you very much for the clarification! I was thinking it MIGHT be this way but I was preparing myself for the worst.

      Again, thank you and I appreciate it!

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      • #4

        You can use this simple debt reduction calculator to see how extra payments will help you save time and money.

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        • #5
          Originally posted by poundwise View Post
          You can use this simple debt reduction calculator to see how extra payments will help you save time and money.
          Ah thank you very much! This is a great tool!

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          • #6
            You can also do this calculation to find out what your exact finance charge will be:

            [(remaining balance) x (APR/100)] / 12

            With the numbers you gave:

            [1,941.97 x .1399] / 12 = 22.64

            Your finance chard will go down a little every month because your balance keeps getting lower as you pay it down.

            Comment

            • #7
              Originally posted by Onwards View Post
              You can also do this calculation to find out what your exact finance charge will be:

              [(remaining balance) x (APR/100)] / 12

              With the numbers you gave:

              [1,941.97 x .1399] / 12 = 22.64

              Your finance chard will go down a little every month because your balance keeps getting lower as you pay it down.
              Thank you! And from this calculation it appears as though finance charge is essentially the interest I am being charged. Is this correct?

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              • #8
                Yes, that's my understanding of it, unless they tack on additional fees for some reason.

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