How to Calculate Accrued Credit Card Interest

Accrued credit card interest can bring financial hardship.

Accrued interest is the amount of interest that you have not yet paid on your credit card account. Because credit cards often have high interest rates, experts advise consumers to pay off the principle and interest on their credit cards as soon as ppossible. Because of these high interest rates, those who only make the minimum monthly credit card payments may find themselves paying a lot of interest until the balance is fully paid.

Instructions

1. Write down the principal balance, which is the amount of money you have charged to the card. The principle balance excludes interest charges. Assume for this example that the principle balance is $3,000.

2. Calculate the monthly interest rate by writing the yearly interest rate and dividing it by 12. For example, if your interest rate is 6 percent, you would divide 0.06 by 12. The result is 0.005.

3. Multiply the principle balance ($3,000) by the monthly interest rate (0.005). The answer is $15.

4. Multiply the answer from the previous step ($15) by 12 (months). The answer is $180. This is the interest due.

5. Subtract any interest you have paid on your credit card from this amount. Assume you have paid $50 in interest. This would mean that you would subtract $50 from $180, which would be $130. This means $130 is the accrued credit card interest.

References

• University of Wisconsin-Madison: Interest Calculation
• Yahoo! Finance; Credit Card Rates Hold Steady; Kate Tomasino; March 16, 2011