Finance Charge is the fee you pay for using the credit or extension of existing credit. This charges would increase the charges you pay for having the credit card or when you never paid your complete credit balance. It can be a flat fee or a percentage of borrowings. These charges are applied to any balance which is carried over beyond the grace period. Use our finance charge calculator to find the finance charges based on current credit balance owed, annual percentage rate and billing cycle length.
Finance Charge is the fee you pay for using the credit or extension of existing credit. This charges would increase the charges you pay for having the credit card or when you never paid your complete credit balance. It can be a flat fee or a percentage of borrowings. These charges are applied to any balance which is carried over beyond the grace period. Use our finance charge calculator to find the finance charges based on current credit balance owed, annual percentage rate and billing cycle length.
Ram has a credit card debt of $6,500 with billing cycle duration of 50 days and an APR percent of 15.50%. Find his finance charge and the new balance he owes?
Finance Charge = 6500 × ( 15.50 / 100 ) × 50
= $138.01
B = F + P
= 138.01 + 6500
= $6638.01
Thus Ram's Finance charge is $138.01 and the new balance he owns is $6638.01
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