Understanding Your Credit Card Interest Rate

February 22, 2010 | By Xpert In Credit Card Fees | Comments(0)

Sometimes trying to understand your credit card interest rate may seem more like an advanced algebra class!  So what is that percentage rate that shows up on every bill? And how is it calculated?  We break it down for you.


Understanding your credit card interest rate doesn’t make it any easier to pay your bill every month but it is a good idea to  understand the fundamentals of what credit card interest is and how it is calculated.

One of the most important terms to understand is APR or annual percentage rate.  This is the rate that credit card issuers charge on the unpaid balance each month.

Even though your interest rate appears on each of your monthly bills, it is actually an annual rate.  Credit companies divide this rate over twelve months to calculate the amount of interest charged.

Here is an example.  Say for instance you have a credit card with a $2000 balance owing.  In January, you made a payment of $100.  That means the remaining balance is $1900.  This is the amount that you will be charged interest on.

Next, take the yearly rate of interest and divide it over twelve months to give you the monthly rate.  The final step is to multiply your unpaid $1900 balance by the monthly.

Although there are slight variations to this calculation with some credit card companies, most use a formula similar to this one.  From time to time, some companies will use a daily interest rate but it is not overly common.

Of course, if you pay off the full amount before the due date, no interest is tallied.  This is by far the best way to avoid many common credit card pitfalls like falling into credit card debt or letting missed or late payments affect your credit score.

When it comes to the basics of using credit cards, there are few things more important than understanding your APR.  It is more then just some number on your bill.

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Originally posted 2009-03-06 11:49:49.

Filed under: Credit Card Fees

Most Common Gift Credit Cards FAQ’s

February 15, 2010 | By Xpert In Prepaid Credit Cards | Comments(0)

If you have ever considered purchasing a gift credit card, chances are you have a few questions. To help you out, we have noted some of the most common FAQ’s that people have when buying these types of cards.

Where can I buy a gift credit card?

These cards are purchased one of three ways. You can buy them in person at one of the millions of locations that carry them including financial institutions, variety stores and department stores. You can also purchase them at several online retailers like Amazon.com. Or you can purchase them directly from card issuers like Visa, Mastercard and American Express through their online store.

How do I use my gift credit card?

These types of cards are used in the same fashion as a regular debit card. You simply use your card to pay for your purchase by swiping it at the cash terminal. Be sure you know your card balance so you don’t get caught short.

Can I use my card anywhere?

You can use your prepaid card anywhere that major credit cards are accepted. This includes in-person retail stores as well as online shopping and virtual malls.

Does my card expire?

Yes. Each gift card has an expiry date. You can continue to use your card until the funds are depleted or you reach the expiry date on your card. If the card expires and you have not used all of the available funds, contact your card issuer about how to access the remaining balance.

Can I return something that I bought with my prepaid card?

Yes. But be prepared to show the retailer the card you made the purchase with. For this reason, it is a good idea to keep cards that have expired. In most cases, the amount refunded will be put back onto your card.


What if I lose my gift credit card?

Not to worry. Most card issuers have a liability policy in place that will prevent you from being responsible for purchases made on a lost or stolen card.

Prepaid cards are a great alternative to a regular credit card. They are easier to be get, handy to have and are a fantastic gift idea for students.

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Originally posted 2009-04-23 15:41:13.

Filed under: Prepaid Credit Cards

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