Credit Card Calculator

This Credit Card Calculator is brought to you by LoanThru.com. It’s a free and user-friendly Credit Card Calculator to estimate the total interest charges and monthly repayment amount. This calculator uses Daily Compounding interest calculation method and calculates the repayment amount based on the minimum repayment due.

NOTE: This calculator assumes a fixed interest rate and uses the 30/360 day count convention to compute the total interest amount and monthly repayment figures. The result generated by this calculator is for reference purposes only, maybe slightly different from some financial institutions due to miscellaneous charges, interest computation & unforeseen circumstances.

 Current Balance (\$) First Month Payment \$ 250.00 www.loanthru.com Interest Rate per annum (%) (i) Min. Monthly Payment Due (%) (ii) Min. Monthly Payment Due (\$) Amortization schedule YearMonth

**Monthly repayment is based on (i) or (ii) whichever is higher.

Amortization Schedule

YEAR # PAYMENT ( p + i ) PRINCIPAL ( p ) INTEREST ( i ) BALANCE
1 2,400.36 2,046.19 354.17 2,953.81
2 1,418.65 1,209.49 209.16 1,744.32
3 837.76 714.24 123.52 1,030.08
4 601.89 531.53 70.36 498.55
5 519.94 498.55 21.39 0.00

What is a Credit Card and How Does it Work?

In this day and age, it would be hard to find someone who didn’t know what a credit card was or what one could do, but there are those who have used cash as a way of spending their entire lives. There is a better way of making purchases and transactions, and the way that we are progressing as a world, the use of credit cards will become a necessity before too long.

In layman’s terms, a credit card is a rectangle of plastic that can fit into a purse or a wallet. It is, in fact, much more than just a rectangle of plastic as it can be used as a form of currency. Credit cards are part of a financial structure that allows a person to borrow money from a banking institution and use it for making transactions in the form of payments.

There are many companies that supply credit cards to consumers. Some of the more popular names are VISA, MasterCard, American Express, Chase, Discover, and Capital One. Each of these companies has their own interest rates and terms, so it is important for each person to investigate on their own which card may be best for each individual or household.

In order to receive a credit card, a person must give their information in the form of an application, which is a contract between the credit card company and the person applying for the card. If the application is accepted, the person will receive their credit card. These cards contain embedded electronic magnetic strips that store information that is used for authorizing payments at designated credit card machines. This allows the person with the card to shop for goods and services at various retail stores or online. The store, of course, must be able to accept credit cards as a form of payment in order to process the transaction. You can also use your credit card to withdraw money from various “automatic cash machines” that are dispersed throughout most cities. These are more commonly known as ATMs.

To pay for items using a credit card, the card must be physically swiped through a special machine designed to read the magnetic information strips or the numbers and other details of the card may need to be manually entered if you are shopping online. The supplier of the credit card will send the bill for the items purchased to the owner of the card who is then required to pay a certain amount per month in order to keep from paying late fees, but there will be a certain pre-arranged amount of interest added to the bill. If the card owner decides to pay the bill in full, there will be no interest added to the amount that is owed. If the card owner neglects to pay the minimum amount of the bill, a late fee is added, and the credit card supplier can put a limit on the amount of money that you are able to charge per month on the card.

There’s nothing scary about a credit card. It has fast become our number-one way of purchasing items, and cash is becoming a thing of the past. For anyone who is wary of making the switch, hopefully this article has shed some light on exactly what a credit card is and how it is used in today’s financial market.