How to calculate the Finance Charge of credit card using average daily balance?
Could we be so kind to assistance me with that:
Most of credit label issuers make use of normal every day change (ADB) to work out Finance Charge (FC). There have been dual ways:
1)average every day change method, together with brand brand new purchases;
2)average every day change method, incompatible brand brand new purchases;
The subject is how to work out a Finance Charge regulating both ways described above.
Specifications of a Card:
Grace Period(GP) = 0 days.
APR = 18.4%
No of Days in a Billing Cycle (BC)=30
Previous Balance =1051.93$
day1/06-day 16/06 : No activity
day 17/06 : squeeze = 257.53$ payment=0
day 18/06-28/06 : No activity
day 29/06 payment=600$
day 30: No activity
According to a bank a assign of credit label for this duration is 29.34, though how they arrived to this amount. Thats a question.
Thank you
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Comments
Unless they charged a fee it looks like they charged a full months worth of interest on your charges for the month. If you add the previous balance to the 257 and the 600 you have 1908 and 18.4% interest on 1908 would be 29.16. for the month.
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