CB ]]>

The Home Trust Preferred VISA will calculate interest daily from the posting date of each purchase when one does not pay off the balance each month.

Another card calculates interest daily from the transaction date of each purchase instead of from the posting date!

Some former department store cards subtracted the payment, if the payment is above a given threshold, before calculating the interest for the statement period, as if the payment were made on the first day of the period.

]]>**Canadianbull said **

Is below formula correct?

If Interest rate = 1.99% for 9 months.

Principal $ = 7000

I = 7000 × 0.0199 × 0.75 = $ 104.475

I = $ 104.48 after 9 months

I = $ 11.61 each month

CB

It's calculated on your *daily closing balance*, for the amount outstanding as of the first statement date on which it appeared. It's very difficult to calculate exactly, much more difficult than calculating daily interest on a savings account or a GIC.

Also adding to the problem is that the credit card issuers apply payments to certain portions of your balance in a very specific sequence, which they do disclose in broad terms, but practically speaking, very difficult to calculate.

Certainly much simpler to calculate LOC interest than credit card interest!

**Idea:** require federally-regulated financial institutions to invest in technology to produce free calculator tools that allows one to input, or import, their credit card transaction data including dates and amounts and then produce a transparent calculation of the interest that takes into account statement dates and payments made. Bill, as a bank shareholder, will probably not agree with this dipping into the shareholders' net income (i.e., dividends), but as a fellow bank shareholder, I'd welcome this move. Banks can afford it. Their payout ratios are still reasonable.

Cheers,

Doug

If Interest rate = 1.99% for 9 months.

Principal $ = 7000

I = 7000 × 0.0199 × 0.75 = $ 104.475

I = $ 104.48 after 9 months

I = $ 11.61 each month

CB

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