How to Figure Out Finance Charges on a Calculator

Credit cards assess finance charges if you carry a balance.

When you carry a balance on your credit card, you are assessed finance changes each month based on the amount you owe and the interest rate on the account. Credit cards typically have very high interest rates because the money is unsecured, meaning you have not pledged any of your assets as collateral that can be seized if you do not repay the loan.

Things You'll Need

• Calculator

Instructions

1. Enter the annual percentage rate on your calculator. For example, if your credit card's annual interest rate is 19 percent, enter "19."

2. Divide by 100 by pushing the division key followed by "100" then "=" to convert the percentage into a decimal. In this example, you would push the "/" followed by "100" then "=" to get 0.19.

3. Calculate the daily interest rate by pushing "/" followed by "365" then the "=" key. In this example, you would get 0.000520548.

4. Calculate the daily interest on your account by hitting the "x" key followed by your average account balance then the "=." In this example, if your average account balance is $3,000, hit the "x" followed by "3,000" then the "=" key to find the daily interest on the account, which is $1.561643836.

5. Calculate the finance charge per period by hitting the "x" followed by the number of days per period. For example, if there are 30 days in the period, push the "x" followed by "30" then the "=" to find the finance charge for the period, which is $46.85.

References

• Digital Federal Credit Union: Calculating Finance Charges