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Credit Cards

Finance Rates, Interest Rates, Introductory Rates

How do credit card companies calculate my finance charges (fees and interest) on my balance?

Finance charges are calculated by applying a periodic interest rate, the annual interest rate that you see on your statement, divided by 12 monthly periods, to the outstanding balance of your account, multiplied by the balance that you have on your card on the closing date of the statement. Many credit card companies calculate your balance differently, so read the fine print about your card before deciding which card to use.



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