I just got a credit card that has a 9.99 percent interest rate and a credit limit of $4000. If I put $285 on?

Question

it, how do I work out how much interest it will cost me? Say, if I take a month to pay it back, how much would the interest be?

Answer 1

It depends on your grace period, look in your terms and conditions of the card agreement and you will see if you have a grace period on purchases as long if you pay the balance back before this amount of day then you will not be charge any interest. I hope that this has helped you answer your question! Best of Luck

As for syllylou's answer you are wrong on you analogy for the balance of $500.00 with 9.9% you were figuring the interest at 9.9% every month and that's not a monthly rate that is a yearly rate when you want to figure you interest on your credit card the 9.9% is you Annual Percentage Rate so you would take your balance times 9.9% and then divide that by 12 to get what you monthly interest charge would be example below

Balance of $500.00
month 1 interest is $4.12
Payment of $50.00
Balance after 1 month equals $454.12
month 2 interest 3.75
Payment of $50.00
Balance after 2 months equals $$407.87
month 3 interest $3.36
Payment of $50.00
Balance after 3 months equals $361.23
and so on and so on
I hope that this answer will also help others figure out how to figure what their credit card interest should be! Best of Luck to all.

Answer 2

No penalty if you pay on time. But if you don't it's 9.9 % on the balance. If there's a balance the following month it's 9.9% again. That's how people get in trouble. They pay the bare minimum each month & the interest keeps getting tacked on every month to the remainder.

Say you borrowed $500 at that rate & only paid $50. a month & never charged anything else. At the end of 12 months you've paid $600. and still have a balance of approx. $371. (or more than half of what you borrowed) & still having 9.9 % added on each MONTH until paid. Not yearly. That's why credit card companies make so much money. Most people think in terms of costing only 9.9% more. That's only true when the balance is paid w/i 30 days.

So if you have a high balance & only pay the minimum it can be years before you even begin to pay off the principal. As all payments go to the interest first.

To me it's not worth it short of dire emergencies. My parents owned their own home & never used credit. They bought it on land contract as did hubby's.

Credit is little more than a way to make someone else richer so you don't have to save to buy something. I only use it for emergencies.

I made the mistake of getting a $6,900. loan at 11% interest. It will cost me $108. a month for 10 years. So basically I'm paying $12,960 or just shy of twice as much. Ain't much of a deal now is it?

Answer 3

Its peanuts. 285 x9.99 per annum is 28.20 a year divided by 12 =about 2 dollars 35 a month.

Answer 4

Not much at all. But it will improve UR credit.

Answer 5

as long as you pay before the deadline, nothing