Explain credit card interest (pay, rate, charge, balance)

[awestover89]

Just a quick question if somebody can explain credit card interest.

I have a credit card with an interest rate of 12.99%. I have always paid the full amount on time, so have never been charged any interest, but yesterday had a car emergency that had to get fixed and put a large transaction on my card. I am not sure if I will be able to pay off the full amount by the due date.

Total charges is about $2000, say I am able to pay $1000, $500 right as soon as I get my statement, and another $500 from the next paycheck, 2 weeks later. Will I get charged $129.90 in interest on the remaining $1000? Or $259.80 on the entire bill amount? Or is it actually closer to 1% interest, since it is just a month and not a year?

The 12.99% is labeled as a standard purchase APR

[MrRational]

oversimplified, but...
12.99% (per year) / 12 months = 1.08% per month

if you don't pay at all the $2000 will be multiplied by 1.08% each month until you do pay it all.
(add for compounding and add'l etc)

if you pay $1200... then the $800 balance will be multiplied by 1.08% each month until you do pay it all.

paying it all and/or asap is better than not.


hth

[elnina]

If you pay as you said, then :
starting balance = $2000
you make payment right away $1000 =
new balance $1000
you pay after statement $500 and then 2 weeks later but before second statement another $500, then all your interest
on the $1000 should be less than $11.
In other words the 12.99% interest of $1000 for one month is just under $11

[Tallysmom]

1000 X 12.99 ANNUAL interest = 129.90
Divide 129.90 by 12 (number of months in a year) = 10.83 for that month. And you have no idea how much I wanted to say "number of months in an annual." Just struck me as funny.