Credit Cards - Calculate Credit Card Articles

After I created the “Calculate Your Daily, Monthly, and Annual Credit Card Interest” page, I was asked numerous times, why did you specifically decide to create that tool and what purpose does it serve? Well, I guess my brief intro on the homepage was a bit too brief. Let me elaborate.

Around the time I created that automated form, I was actually trying to make the decision of whether or not it’d be worth my effort to transfer my credit card debt into another credit card. I had multiple 0% balance transfer offers on existing cards, but knew better than to think it was a no-brainer decision, since there’s always a transfer fee associated with them.

The first step I took was to calculate how much interest I was losing per month. The idea was that the one time balance transfer fee may equate to be about three months worth of interest, in which case I could potentially pay off within two months. If that were the situation, then I would be wasting time calling up their customer service to perform the transfer. Not to mention, it’s just a dumb decision to pay more in the long run.

Once I got the formula to calculate the monthly interest rate and determined it was a good idea to perform the transfer, it dawned on me that it’d be extremely interesting to figure out how much I was “spending” by carrying this balance for so long. Of course my balance fluctuated throughout the months and years, but I just had to simplify my decision making process by fixing the balance to the amount at the time. What I discovered was pretty eye opening the moment I saw it.

I believe my daily interest came out to be about $1.25, that like one item from the McDonald’s Dollar Menu (plus tax). But, I haven’t been eating at McDonald’s and a side salad sounded pretty good at the time. Then, I thought, what if I escalated the calculation to a week? It came out to be $8.75. That equated to about 3 gallons of gas for my car. And what the heck? I’m always filling up my tank. That extra money would come in really handy!

Essentially, it put the money I was spending on credit card interest into perspective. Seemingly small amounts really add up and I couldn’t believe it. At that point, I made it a goal of mine to erase my credit card debt as soon as possible. So, my purpose of the form is mainly to provide people, in a similar situation that I was in, some perspective. It’s extremely important to manage your money (especially for kids) and figure do what you can to lower/extinguish your credit card debt.

I truly hope some people out there who have used my form realized the same lesson I did. For those who are severe bad credit situations, I recommend determining and monitoring your credit score first to determine how deep you’re in it and then just work your way up.

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You may have heard that the new Credit Card Act of 2009 has been passed by the government to help regulate credit cards more closely. But what is it exactly and what does it mean to you? Hopefully, this brief article will help shed some light on this topic and answer your questions.

The CARD Act was passed on Monday, February 22nd. Simply put, this act is supposed to protect the consumer. Some of the ways it protects the card holder is by requiring banks to provide important information in a timely manner:

45 days notice must be provided to the card holder for significant changes to the terms of their cards
The bill must be provided to the card holder at least 21 days before payment is due.
The bill will provide additional information, such as how long it will take to pay off your balance if you continue to only pay the minimum balance due
The bill will also provide information on how much you need to pay per month in order to pay off the bill in three (3) years

Interest rates are protected for the first year

Your credit card company now cannot increase your interest rate for the first year after you open an account
After the first 12 months, rate increases can apply only to new charges.
You won’t get an increase for late payments that are within 60 days of the due date or for late payments to other creditors.
Balances with multiple interest rates, any payment above the minimum payment required must generally be applied to the balance with the highest interest rate.
Read More about interest rate terms here

Students are less preyed upon:

People under the age of 21 will either need a co-signer or evidence that they have enough income to make monthly payments.
Card companies can no longer market cards on college campuses.
Read more here about how Students are affected

What Are The Benefits to Calculating Your Daily Interest Rate?

What is the Credit Card Act of 2009?