6 ways to calculate credit card interest
Previous Balance
-Calculations can be made by using the balance at the end of your previous billing activity excluding all activities during the current billing cycle.
-This excludes payments, purchases, and fees from the past cycle.
Ending Balance
-Calculations can be made by using your most current ending balance, this includes payments and purchases, etc...
Adjusted Balance
-The interest in this method is calculated by using your previous cycle plus payments or other credits in your current cycle.
-This excludes purchases in the current cycle.
Average Daily Balance
-The interest is calculated in this method by adding the number days within the billing cycle and dividing the balance by the number of days to find the average.
Two Cycle Average Daily Balance
-This calculation is similar to the average daily balance except both the current and past billing cycle are taken into account.
Grace Period
-This is where you pay the most favorable interest calculation as long you pay the entire balance by the due date.
-Calculations can be made by using the balance at the end of your previous billing activity excluding all activities during the current billing cycle.
-This excludes payments, purchases, and fees from the past cycle.
Ending Balance
-Calculations can be made by using your most current ending balance, this includes payments and purchases, etc...
Adjusted Balance
-The interest in this method is calculated by using your previous cycle plus payments or other credits in your current cycle.
-This excludes purchases in the current cycle.
Average Daily Balance
-The interest is calculated in this method by adding the number days within the billing cycle and dividing the balance by the number of days to find the average.
Two Cycle Average Daily Balance
-This calculation is similar to the average daily balance except both the current and past billing cycle are taken into account.
Grace Period
-This is where you pay the most favorable interest calculation as long you pay the entire balance by the due date.