My Annual Percentage rate on my Credit Card is 19.24%, but my perodic rate is only .052172%, PLEASE READ!!!?

Question

So does this mean that each statement, my interest is only .05%, or is it 19.24%?

I had about 400 on my credit card this statement, and my finace charges (is that interest?) were only like $6? I

I am really confused, what does that mean?

Answer 1

First of all, you need to understand that the bulk of the revenue from credit card companies come from the finance charges and annual fees associated with the card. If you do not pay off your credit card balance in full, you will need to pay interest. On top of that, if you exceed your card limit or do not make your monthly payment on time, you are slapped with an extra finance charge. And if you withdraw cash from your card, you also need to pay some form of surcharge. These are just a few common ways that credit card companies make money from you.

For credit cards that do not carry annual fee, the interest rate associated with them is likely to be higher than those with an annual fee. This makes sense, as the card companies want to offset their revenue loss from the annual fee by charging a higher interest rate. In fact, the gain from the higher interest rate can even be more lucrative than the annual fee alone.

However, there are still some benefits to owning such a card. If you are one of the minority of people who pay off the entire outstanding balance in full each month, a no annual fee credit card is actually going to do you a lot of good. There is no need to pay any additional fee to the card companies or go through the trouble of asking for a waiver of the fee at the end of the year. You can use the extra money for other purpose.
Go to : http://www.credit-card-gallery.com/calculator/ and calculate your annual fees.

Answer 2

Your APR (Annual Percentage Rate) is 19.24% but that is compounded monthly. The .052XXX number is the periodic interest rate which is the average amount of interest you are paying DAILY.

Also, there is a 30 day grace period on all charges. So you only get charged interest on the balance that has been carried for more than 30 days at the time the statement was issued (in most cases it's the amount of your previous balance after your last payment) .

Answer 3

19.24% / 365 = .052712 That is the daily interest rate. That is the interest that they charge you for one day. 400 X .052712 X 30 = $6.33

Answer 4

Yor perodic rate is not correct. 19.24%/12= 1.6% perodic rate. $400*1.6%=$6.40 which was your finance charge. By the way...you may want to get a better credit card!

Answer 5

Your periodic rate is your daily rate, not your annual rate. A daily rate of .052172% amounts to about 19% per year.

If you have credit card debt, by the way, you should check out http://www.prosper.com . You might be able to convert the debt to a much lower rate.

Answer 6

it's a good question

Answer 7

I was wondering much the same thing

Answer 8

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