Do you understand how your credit card company calculates interest and exactly how the APR or annual interest rate is used on your monthly statements?
In this video I go through the exact way that credit cards calculate interest, how it applies to your balance and the key mathematical calculations you will need to make if you want to figure out your monthly statement interest cost.
The way credit card interest is calculated in the UK is different to the United States and I explain this in detail - the way the annual interest or APR is converted into the monthly equivalent is different as the US credit card industry uses simple annual interest rates and the UK uses compound interest rates.
If this all sounds a little complicated, I do my best to explain it as simply as possible in the video.
Make sure you remember that different balance types have to have their interest calculated individually before you add them all up to the total interest due at the end of the month.
In this video I go through the exact way that credit cards calculate interest, how it applies to your balance and the key mathematical calculations you will need to make if you want to figure out your monthly statement interest cost.
The way credit card interest is calculated in the UK is different to the United States and I explain this in detail - the way the annual interest or APR is converted into the monthly equivalent is different as the US credit card industry uses simple annual interest rates and the UK uses compound interest rates.
If this all sounds a little complicated, I do my best to explain it as simply as possible in the video.
Make sure you remember that different balance types have to have their interest calculated individually before you add them all up to the total interest due at the end of the month.
What is the difference between P.A and APR?
Hey – I’ve just started to binge watch your videos. They are so informative and clear! Thank you. Just one thing though, I’ve noticed the volume on your videos is super low even when I’ve got headphones on and my phone is on full volume. Have you considered getting yourself a mic?
Hi Sasha, I have a question, i have a credit card that has sat on 0 for nearly a full year, I don't intend on using it, I was going to close it, but I saw somewhere that closing it will send my credit utilisation up on my credit score and have a negative impact on my credit score, is this true?