How can I get credit card companies to lower my interest rate?

Discover card interest rate calculator

Simple enough.

,Stop using credit cards to live beyond your means.

If you donu2019t have the money in the bank to pay for something you want but donu2019t really need, donu2019t buy it.

,Apply one or more credit cards that offer flat fees on balance transfers.

The interest rate the banks offer on these cards is irrelevant because they arenu2019t going to be used to charge anything above and beyond transfers.

,Transfer the outstanding balance of your existing card to one of those cards.

Important you do not transfer to more than one.

,Divide the balance by 12, and strive to make that payment.

,If you find that you cannot pay off the balance in the allotted time, a month before the transfer period ends, transfer what remains to another card offering balance transfers.

Note: Do not miss making the minimum payment or continue to make payments beyond the expiration date.

If you do, the interest youu2019ve been saved will be added to your existing balance which results in zero savings.

,In the end you will not be paying 20u201325% interest on the money youu2019ve spent living beyond your means.

Youu2019ll be paying 4% or less.

,Calculate the savings you are realizing paying a transfer fee rather than 20u201325% interest rate and put the difference in an interest bearing savings account.

In the end youu2019ll discover that youu2019re paying 1u20132% annual interest using balance transfers.

Credit card interest rate calculator

One of the most important features of a credit card is the interest rate.

It affects the cost of carrying a balance on your credit card, a cost you probably want to minimize or even eliminate.

Heres what you need to know and understand about credit card interest rates so you can better manage your existing cards and choose the best credit cards in the future.

Credit card calculator

Two answers to what seems a simple question.

,Simple answer: If you pay off your credit card every month in full the balance is,Prior Current Balance Amt - Payment + New charges = Current Balance,1000.

00 - 1000.

00 + 500.

00 = 500 Balance.

,NO interest is calculated on what you bought that month because you were in what is called the u201cgrace periodu201d.

,Complex Answer, because it varies from card provider to card provider based on their terms: If you DO NOT pay off your credit card every month in full, the balance is:,Prior Balance Amt + Interest - Payment + New Charges = Current Balance.

,(This assume no late fees, but those can also be added on if you do not pay the minimum on time.

),The trick is in how the Interest portion is calculated.

Usually it is both daily and compounded.

,If your CC has a 15% interest rate (APR is the term to look for) on an unpaid balance, divide 15/365 to get a daily rate of .

041086.

(Some calculations use 360, no idea why.

) They take your unpaid balance and at the end of every day, multiply that by your daily interest rate and add it to your balance.

EVERY DAY.

(Thatu2019s compounding, what Einstein called the most powerful force in the universe.

),So using similar numbers from the simple example, but without the payment in full, but rather a minimum payment.

,Charges from last month - minimum payment = Current Balance,1035.

00 - 35.

00 = 1000.

00,Thereafteru2026.

,Day 1,1000 * .

041086% = 00.

42,Day 2,1000.

42 * 041086% = etcu2026.

.

,Or over 30 days,$ 1,011.

98,(Forgive the math if it is not exactly correct; you get the idea.

),You next bill will then show,Interest +Previous Unpaid Balance + new Charges - Payments = New Balance.

,Now I have finessed a couple of things, not the least of which is how your credit card company calculates what is called your average daily balance.

That is usually explained either on the back of your bill or on the companies website.

I pay no attention to it because I pay off my credit card every month in full.

I recommend that to you as well if you can possible do it.

Or at least understand that the lovely (fill in the blank) you bought on sale for $100, actually costs more because you are paying interest on the money you borrowed from the credit company to pay for that (fill in the blank).

,Here are a couple of webpages, one from a credit card company and one from a perhaps more disinterested party.

,Good luck.

Monthly interest charge calculator

Calculating monthly accrued interest,To calculate the monthly accrued interest on a loan or investment, you first need to determine the monthly interest rate by dividing the annual interest rate by 12.

Next, divide this amount by 100 to convert from a percentage to a decimal.

For example, 1% becomes 0.

01

Credit card compound interest calculator

(1+x)^12 = 1+y,y is the number they quote you as APR, x is what they charge you monthly on outstanding balance.