Charges from visa card and master card?

Question

regarding Visa card and master card, they are the same things, but I am wondering bank how to count my purchase interest or monthly, annual interest, or something else? the condition is that I never over draw money from bank machine, just purchase stuff at stores or online or pay the bill. Thank you in advance.

Answer 1

The finance charges are determined by the average daily balance on the card x the periodic rate.

For instance, if you charged $1,000 on the 1st day of your cycle and the rate on the card is 18% your finance charges would be 1000 X  0.015 (.18/12) = $15/month or $180 year if you just carried that 1000 balance for the whole year.

I hope this helps.

Answer 2

the first guy is almost right...you actually want to divide the APR as a percentage his example being 18% by 365 days,

(.18/365=.000493) that is your daily factor of interest. Now you take you average daily balance and multiply by your factor then multiply that by the number of days in your current billing cycle. That is how they calculate your finance charges.

That is why when you carry a balance every purchase you make on top of your current balance start accruing interest immediately...aside from the interest they are charging daily is accruing daily also...that is why a payoff changes daily too.