Using the unpaid balance method, find the current month's finanace charge on a credit card account having the?

Using the unpaid balance method, find the current month's finance charge on a credit card account having the following transactions:


Last months balance: $875


Last payment: $50


Annual Interest rate: 21%


Purchases: $253


Returns: $932





What's the finance charge?|||That depends, if you did cash advances on you card or not, as they earn interest from the date they are done until they are paid in full. You shouldnt see anything as you credit was more that your previous months balance, so it has been paid in full.





Credit card companies cannot charge interest on new purchases, so they are still interest free as long as you pay next months balance in full.





If you do carry a balance then you interest ammount will fluctuate. Lets say your cut off is the 10th of each month, and you start off with a balance showing of 1000.00, then you are charged interest from the 10th of the month untill you mak a payment, so on the 25th you make a payment of 500.00, as of that date you are now paying interest on the amount left owing, 500.00 till the next statement print date.





1000.00 from the 10th to the 25th = 15 days of interest on that amount


500.00 from the 25th until the 10th of the next month= 15 days on 500.00 assuming the month has 30 days.





last months balance875-payment50=825


remaining balance825-credit 932= -107 +


credit balance-107+new purchases=146





As long as you pay the new balance of 146 by the due date you should see no interest.








This may help as well to calculate interest





take the principal times the interest rate divide by 365 and times for the number of day from posting to billing.





1000 X 19.99% / 365 X 30days = 16.43 interest each month