Interest on credit card
Credit card interest rate is the rate charged by card provider on the borrowed amount. However, the interest charges are applicable only to those cardholders who don’t pay their outstanding in full. On receiving the credit card bill/statement, you should pay the complete bill amount by the end of credit free period to avoid paying interest charges on the outstanding amount.
If you don’t fully pay off your credit card bill on time, (or you pay only minimum amount due) Unpaid balance — gets carried over to the next billing cycle. If you carry a balance, you’ll most likely be charged interest on the portion of the balance you didn’t pay.
when you keep a balance on your card, your card provider uses the APR(Annual Percentage Rate) for calculating interest to add to your balance. It is calculated by using your daily balance—the amount of money you owe at the end of each day. For this the credit card provider divides your APR by 365(days in a year) to convert to a daily periodic rate.