1. What is Credit Card Interest Calculation?

Credit card interest calculation determines the monthly interest charged on outstanding balances. In the Philippines, this helps cardholders understand how much they'll pay in interest charges when carrying a balance from month to month.

2. How Does the Calculator Work?

The calculator uses the credit card interest formula:

Where:

• \( I \) — Monthly interest (PHP)
• \( P \) — Outstanding balance (PHP)
• \( r \) — Annual interest rate (decimal)

Explanation: The formula calculates monthly interest by dividing the annual rate by 12 and multiplying it by the outstanding balance.

3. Importance of Interest Calculation

Details: Understanding monthly interest charges helps Filipino credit card users make informed decisions about debt management, budgeting, and repayment strategies.

4. Using the Calculator

Tips: Enter outstanding balance in PHP and annual interest rate as a percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often is credit card interest charged in the Philippines?
A: Most Philippine banks charge interest monthly on outstanding balances that are not paid in full by the due date.

Q2: What is the typical interest rate range for Philippine credit cards?
A: Annual interest rates in the Philippines typically range from 24% to 36% (2-3% monthly), though rates vary by bank and card type.

Q3: Are there additional charges besides interest?
A: Yes, Philippine credit cards may also charge late payment fees, over-limit fees, and other service charges.

Q4: How can I avoid paying interest?
A: Pay your full outstanding balance by the due date each month to avoid interest charges on Philippine credit cards.

Q5: Does this calculation include compounding?
A: This calculator provides simple monthly interest. Actual credit card interest in the Philippines may compound if balances remain unpaid.