How Can I Calculate a Credit Card's APR Information?
The annual percentage rate, or APR, of a credit card represents the annual interest rate without the effects of interest compounding. Knowing the APR helps you compare different credit cards. If you never carry a balance, the APR does not affect you because no interest will be charged. However, if you do, finding the card with the lowest APR can save you money in interest charges.
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Instructions
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Check your monthly credit card statement to find your outstanding balance, the number of days in the statement and the interest charged for the month.
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Divide the interest paid by the number of days in the statement to find the daily interest paid. For example, if you paid $44 in interest during a statement period of 30 days, divide $44 by 30 to get $1.466667 of interest per day.
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Divide the daily interest charged by the outstanding balance to find the daily interest rate. In this example, divide $1.466667 by $2,400 to get 0.00061111.
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Multiply the daily interest rate by 365, the number of days per year, to find the annual interest rate. In this example, multiply 0.00061111 by 365 to get about 0.2231.
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Multiply the annual interest rate by 100 to convert to an annual percent rate. In this example, multiply 0.2231 by 100 to get an APR of 22.31 percent.
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