So like I have an 18% card right. So what I'm trying to understand is how the bank charges me for that 18%. Like say I buy something on credit card for $40. Do they charge me the 18% at the end of the month or per purchase? I'm new to this and have no idea. O and if you have any heads up please tell. I already know not to lose it and don’t never over charge. Also don’t give out the number on the card and pay you’re bills on time. Anymore I should know please tell. Thanks. It's Bank of America.
2007-01-31 08:45:45 · 9 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
♥ ♥ thats 18 % a year.. ♥ ♥
2007-01-31 08:48:17 · answer #1 · answered by Anonymous · 0⤊ 1⤋
18% is the annual percentage rate (APR). That means that for any balance you have on the card, they are adding an 18% fee, if you left the balance for a year.
There are many details. For example, some cards charge no interest at all if you pay your bill off to zero. Others charge interest from the time of purchase.
The actual dollar interest is calculated by applying the 18% rate, divided by the time you had the balance on the card. For example, if you have a balance on the card for only a month or two, then you'd only pay about 1/12 or 2/12 of the 18% interest. The card company checks your balance in an organized way, like once a month or once a day (this is the rate at which it "compounds"), to determine how much interest to charge.
2007-01-31 16:49:01 · answer #2 · answered by Steven D 5 · 1⤊ 0⤋
Steven D explained it best. All I can offer is for you to try your best to manage your usage of any Credit Cards as for many people today, that is quite the challenge.
Now that you have been approved for one Credit Card, watch the many offers in the mail saying that you are now pre-approved for another card.
In all honesty, you need to use a Credit card to establish your credit, but only use if you know that you will be able to pay it off in a relatively short period of time. It is very easy to throw a purchase on your card and next thing you know the card has reached it's limit and you will then be scrambling to either make the minimum payment or get stuck with a consolidation loan to pay it off. And then the whole process starts again.
I say this as I am a Loans Officer and I see this daily.
2007-01-31 16:58:22 · answer #3 · answered by Trevor T 2 · 0⤊ 0⤋
Your question about the interest appears to be answered, the only other thing I want to throw out there is to be very careful with the interest rates. Credit cards usually have something in their terms that allows them to change the interest rate at any time. Be very careful of this.
You're better off if you dump the credit cards and not be slave to them.
2007-01-31 17:55:50 · answer #4 · answered by Jen G 5 · 0⤊ 0⤋
i think it would be 18% of the total balance, but keep in mind most credit cards have a grace period so if you pay off the full amount in some many days then you are charged nothing.
2007-01-31 16:49:32 · answer #5 · answered by bshelby2121 6 · 0⤊ 0⤋
Call and ask if they will lower that. Lots of time they will. Try to pay it off right away before the end of the month and you won't have to pay any interest.
2007-01-31 16:49:08 · answer #6 · answered by Militant Agnostic 6 · 0⤊ 0⤋
that's 18% per year
2007-01-31 16:50:52 · answer #7 · answered by David 3 · 1⤊ 0⤋
if you pay it off every month you have nothing to worry about but if you dont the 18% will be tacked on each month to the balance you do not pay
2007-01-31 16:50:05 · answer #8 · answered by whateverbabe 6 · 0⤊ 1⤋
Go to : http://www.card-gallery.com/ and check interest rate of credit card which you have and also get information about other credit cards.
2007-02-01 01:19:33 · answer #9 · answered by alexa dion 3 · 0⤊ 0⤋