How to Calculate APR Finance Charges on My Credit Card
- 1). Determine the annual percentage rate (APR), which is provided on your monthly credit card statement. Look for a percentage such 9 or 20; lower and higher percentage rates are also commonly applied to credit card accounts.
- 2). Divide the APR by 12, which will break down the APR to the monthly interest rate that is applied to your credit card. For example, if your credit card has an APR of 9 percent, divide 9 by 12, which is 0.75.
- 3). Check that a 0.75 percent interest rate is applied to your monthly balance.
- 4). Determine your daily periodic rate. Divide your credit card's annul APR by 365 (the number of days in a calendar year). For example, if your credit card has a yearly APR of 21 percent, divide 21 by 365 to get .06 percent. If your account balance is $50, you would multiply 50 by .06 (your daily periodic rate) and then 28 (for the number of days in your billing cycle). In this case, your monthly finance charge is $0.84.
- 5). Report any errors on your monthly credit card statement to your credit card company.