How Credit Card Interest Works (Credit Cards Part 2/3)

I'll explain how credit card interest works and how it's charged!
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Credit card interest is not well understood by most of us, but it's something we should all understand clearly. I'll explain how credit card APR interest works with their average daily balance (adb) method that most credit cards use.

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#honestfinance #creditcards

[dailychannel]

I may or may not have replayed this video 3-4 times...

[SnowBunneh]

So here I was horrified thinking they would charge 24% out of my total balance so 640/100x24= $153.
Also my family had a really bad experience with creditors so I feel anxious with any debt in general.

[djangogeek]

Super important information here that I never learned in school, college, or from family. Very helpful!

[nyangweso]

I wasn't planning on carrying a balance, but this is super helpful to know that if I ever forget for a day or two I won't be paying say 20% of 1000 dollars in interest .

[cboy-ouhr]

Where were you in school when I needed you man lol

[GrandLineInvestments]

Amazing! I thought it was 20% per month on the balance owing! Wow this makes a huge difference

[brandonbee]

Thank you!! I thought I was going to be charged a full 17% on my balance every single month. I was terrified. lol

[michelleh]

Thank you, I'm 64 and always wonder how that was done. Thank you so much. That was the most simplest tutorial.

[colinstarr]

I always thought it was a daily interest rate. Great to know it’s an average monthly usage and charged as a monthly interest rate. Good tips. Spend higher ticket items end of the month. Pay down throughout the month. Thanks for a quick and simple video!

[jeffreyjackman]

You're a genius bro... My credit card agent didn't tell me this!!

[mariah.]

I like that the video is short or divided into parts. I get so bored if it is a long video. Very helpful!

[MrKingcuellar]

Seriously this was dumb down so much.. This is the one video i needed. Every other video make it so complicated

[src]

Extremely helpful. I was trying to find the difference between a heloc interest rate and a credit card interest rate. You've beautifully explained credit cards here.

[captoshu]

Thank you for breaking it down and showing the work along the way! I tried reading it from the credit card statement and couldn't make head fron tails. Excellent video!

[eiedzyk]

Is that it? Charged 18$ for not paying back 1000$? I’ve had a 30%APR for 4 years and this is the first time I can’t pay it off in full and will owe like 400$.

[sportyfareal]

Great job explaining. I added the days 9+9+9+1 and it equals 28 days when you showed us 30 days. This is because from 10-19 is actually 10 days and 20-29 is 10 more days. So the corrected days is 9+10+10+1 which would give us the 30 days total. Im just trying to understand totally so i caught it.

[literaryartist]

You know I love the video and I do confess to being confused when I first heard of this with words like 'AVERAGE' 'DAILY' 'BALANCE' 'PERIODIC RATE' 'APR' 'INTEREST' 'RATE'. But sit down and breathe. It's really simple math people. Breakdown the words. Underline 'DAILY BALANCE'. Every starting day, what was your starting balance? Add all those up and then find the 'AVERAGE' [of that particular billing cycle]. Then divide your APR with all the days in that one particular year. Then multiply that number by the days in the particular billing cycle. I get it. I've been there. Seems too complicated but reality is that it's simple arithmetic. Finance has a way of making it all seem like a Chris Angel or David Copperfield Show. Or David Blane or who ever you like. Great video though. But I honestly think you made it a bit more complicated than it is.

[chicagonative]

I'm going to come back to this video if I'm ever late on my credit card payments thank you so much

[hardikagarwal]

The best video on internet I was looking to get a credit card but i was worried that how my interest will be calculated but this video cleared all my doubts thank you so much

[UnLikeU]

Finance Director here and I just Bro Hugged you through the telephone.🤝 You can't make it any simpler. 💪