Calculating credit card interest is always a complicated task, especially when you have more than one card with different credit providers, but we're here to help you with this mission.
But how can I calculate credit card interest correctly? Credit card interest, popularly known as revolving credit, is triggered when the full amount of the bill isn't paid.
Minimum payment is a service offered by credit card companies for those who do not have the money to pay the full amount of the bill and works as debt financing.
Important information, interest, fees and more
However, in Brazil it is 352,76% per year and 15% to 20% per month, one of the highest rates in the world, according to a survey by Proteste.
For a practical comparison, the annual interest rate on loans in Argentina is 47.40% and 24.99% in the US. The interest rate on loans in the country has been falling, but it remains insignificant for Brazilians.
Check out now how to calculate your credit card interest
Credit card: calculating interest on minimum payment
Next, you need to take the total amount of the invoice for which you paid the minimum. Example: R$ 880.00.
> Try to find the permitted amount on the invoice, for example: R$ 176.00.
Calculate the revolving balance as follows: total invoice amount (subtracting) minimum amount. Example: R$ 880.00 – R$ 176.00 = R$ 704.00.
Need to understand the monthly revolving credit interest rate? Call your provider if you can't find this information on your bill. Example: 14.72%.
> Now that you know the percentage, do the following calculation to find interest: revolving balance (multiplied) by the interest rate. Example: R$ 704.00 x 14.72 = R$ 103.62.
To find out what the outstanding balance will be on the next invoice, calculate: revolving balance plus revolving interest. Example: R$ 704.00 + R$ 103.00
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