how is interest on credit cards calculated.?

[agirlygirlinlovewithaboy]

I'm just going to put my specific situation because every other question I've read confuses me.

Now, I had someone wirte me a bad check for about 1000 dollars for money they borrowed from me. Well, it bounced (of course) and I paid bills with that money before I realized this person had written me a bad check. Long story short, I ended up in the negative about 1200 dollars. No big deal except My wedding was in 3 months and I hadn't bought my dress yet. SO, I just had to use my credit card for the bills I owed and other wedding expeses. Right now I owe about 2500. It says I have to pay a minimum 20$ before the 31st (BUT I'M SO PAYING WAY MORE) I'm paying about 600 on it, because the rest of my check has to go toward my negative bank balance. SO my question is this: will my interest be added monthly? so like if I pay 600 off of my 2500 dollar credit card statement, I owe them 1900. So do they add my interest rate of 11% to the 1900 and then I owe them that much next month?
And then are cash advances different or the same. I owe 806 in cash advances. So will they charge me just the 19% at the end of this month for the money I owe them for the cash advance? I'm super confused. Thanks in advance.
but the whole "interest is calculated daily" thing makes no sense. What does that mean? If on a cash advance, my interest pay back rate is 19%, they take 19% every day, so by day 5, they've doubled my cash advance bill? I'm so confused

[Steveo]

Interest is compound monthly on credit card balances. So for example I will use 12%, because it's easier here, if you owed $1000 by the end of the month and paid only $100, then you will owe them $900 on the balance and $9 for the interest. That will make your balance for the next statement $909. If you only pay $100 again, then you reduce your balance to $809, but you will owe them $8.09 for interest. Get the picture?

As far as the cash advance, that is another story. Usually, the credit card companies hit you for a cash advance fee of 2% or more. So a $1000 advance becomes $1020 by the time you get your statement, plus the interest on the $1020 from the date of your advance. Probably compounded daily.

The someone who wrote the check to definitely compouonded your problems. I hope your wedding goes better than this situation.

[the d]

I'm confused too!!!

Whay would you lend someone money when you don't even have much money yourself?

[quizzard123]

If you pay off your credit card in full, you'll pay no interest. That's the simple part. For cash advances, you pay interest from the day you receive it to the day they receive the payment.

Beyond that, if you fail to pay even $.01 of your balance, they will charge you full interest on the entire balance from the day of purchase.

When they receive your payment, they will apply it to the various parts of your account (purchases vs cash advances) in the manner set out in your card agreement. From that point, that portion of the debt stops collecting interest, obviously. The rest continues to accumulate each day until it's paid.

So you'll likely see two interest charges (if you paid it off in the second month, let's say). You'll see one interest charge soon after your due date, which will be the interest from the time of purchase to the due date. Then, just after the NEXT due date, you'll see another interest charge for the remainder (including interest on the interest from the previous month).

It is confusing, but it's the way it works.