How does credit card bills charge their interest rate?
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example i have swiped a purchase of 10000, lets say the interest rate stated is 24% per annum>>>> what is the interest rate per month, breakdown, etc...
How does credit card bills charge their interest rate?It really depends on the credit card company. It also depends on whether that $10,000 swipe was a local or overseas purchase, or if it any portion of it was a cash advance. As a principle of good money management, you have to be VERY careful with credit card companies because there is no fixed rule about interest rates or how they are charged. Even though the banks are competing against each other to get business, they can pretty much charge whatever rate they want. They can also change the way the interest charges are calculated whenever they want. The only rule they are mandated to follow is that they must notify the consumer of changes.
What you have to understand is that although these credit card companies seem to have a stellar corporate image on the surface, most of them are run by crooks. They print the terms of the credit line in such fine print and with such confusing language that most people who are using credit cards don't really understand the what they are really paying.
Even if they tell you that you wil be paying 24%, that percentage could easily jump to 29% if you make even one late payment, and the late payment doesn't necessarily have to be on the account that you have with them. They aggressively monitor your credit file in all the credit bureaus, and if they notice that you are late in paying other credit accounts, or if your debt-to-income ratio suddenly increases, or if you begin applying for many other lines of credit, they can arbitrarily lower your credit rating and jack up your interest rates.
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