-
Step 1
Look on your credit card statement to find the average daily balance and the annual percentage rate (APR). You will also need to find the percentage of the balance the credit card issuer uses to compute the monthly payment. This may be listed on the monthly statement. If not, call the issuer's customer service number on the back of the credit card and ask.
-
Step 2
Find your monthly finance rate by dividing your APR by 12. For example, if the APR on your card is 18.0 percent, your monthly finance rate is 1.5 percent.
-
Step 3
Multiply the monthly finance rate by your average daily balance to find your monthly finance charge. For instance, if you have an average daily balance of $2,000 and a monthly finance rate of 1.5 percent, the monthly finance charge is $2,000 times 1.5 percent, or $30.
-
Step 4
Calculate your monthly payment. Multiply the average daily balance by the percentage the credit card issuer sets for your account. If the percentage is 2.5 percent, then on a balance of $2,000, your monthly payment works out to $50.
-
Step 5
Find the portion of your monthly payment applied to the principal balance you owe. Subtract the monthly finance charge from the monthly payment. For the examples from steps 3 and 4, this is $50 minus $30. In this example, after you make your $50 payment, the amount you owe will be reduced by $20, from $2,000 to $1,980.
