1. What is the BDO Credit Card Interest Formula?

The BDO Credit Card Interest Formula calculates the interest charged on credit card balances based on average daily balance, monthly interest rate, and number of days in the billing cycle. This helps cardholders understand how much interest they will be charged on their outstanding balance.

2. How Does the Calculator Work?

The calculator uses the BDO interest formula:

Where:

• \( ADB \) — Average Daily Balance (PHP)
• \( R \) — Monthly Interest Rate (%)
• \( D \) — Number of Days in Billing Cycle
• \( I \) — Interest Amount (PHP)

Explanation: The formula calculates interest by multiplying the average daily balance by the interest rate and number of days, then dividing by the standard 30-day month factor.

3. Importance of Interest Calculation

Details: Accurate interest calculation helps cardholders understand their financial obligations, plan repayments, and avoid unnecessary interest charges by paying balances on time.

4. Using the Calculator

Tips: Enter average daily balance in PHP, monthly interest rate as a percentage, and number of days in billing cycle (typically 30). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is Average Daily Balance?
A: Average Daily Balance is the sum of daily balances divided by the number of days in the billing cycle.

Q2: How is the monthly interest rate determined?
A: The monthly interest rate is set by BDO and specified in your credit card terms and conditions.

Q3: Why divide by 100 and 30 in the formula?
A: Dividing by 100 converts percentage to decimal, and dividing by 30 standardizes the calculation to a monthly basis.

Q4: When is interest typically charged?
A: Interest is charged when you carry a balance beyond the payment due date or use cash advance features.

Q5: How can I avoid paying interest?
A: Pay your full statement balance by the due date each month to avoid interest charges on purchases.