Common use of How We Calculate Interest Clause in Contracts

How We Calculate Interest. We calculate interest on your balances each billing cycle. Interest is calculated separately for Purchases, Cash Advances, and each balance subject to different promotional terms. We round all APRs to the second decimal place and all monthly interest rates to the third decimal place. The method we use is called the average daily balance (including new transactions). This method results in compounding interest. Under this method, interest is calculated on each balance on your Account as follows: a. First, at the end of each day, we calculate your daily balances. Each daily balance equals: (i) The balance at the start of the day; (ii) Plus any new transactions, interest, fees and other charges (except for new Purchases when the grace period applies); (iii) Less any payments or credits. b. Next, we add all the daily balances together and divide the sum by the number of days in the billing cycle. The result is an average daily balance (which is identified on your billing statements as the “Balance Subject to Interest Rate”). c. Then, we multiply the average daily balance by the monthly interest rate. The monthly interest rate is the Annual Percentage Rate that applies to the balance divided by twelve (12). The result is the monthly interest charged on that balance. d. Finally, we add all the monthly interest charged on each balance together. The result is the total interest charged for the billing cycle (which is identified on your billing statements as the “Total Interest For This Period”).

How We Calculate Interest. We calculate interest on your balances each billing cycle. Interest is calculated separately for Purchases, Cash Advances, and each balance subject to different diferent promotional terms. We round all APRs to the second decimal place and all monthly interest rates to the third decimal place. The method we use is called the average daily balance (including new transactions). This method results in compounding interest. Under this method, interest is calculated on each balance on your Account as follows: a. First, at the end of each day, we calculate your daily balances. Each daily balance equals: (i) The balance at the start of the day; (ii) Plus any new transactions, interest, fees and other charges (except for new Purchases when the grace period applies); (iii) Less any payments or credits. b. Next, we add all the daily balances together and divide the sum by the number of days in the billing cycle. The result is an average daily balance (which is identified identifed on your billing statements as the “Balance Subject to Interest Rate”). c. Then, we multiply the average daily balance by the monthly interest rate. The monthly interest rate is the Annual Percentage Rate that applies to the balance divided by twelve (12). The result is the monthly interest charged on that balance. d. Finally, we add all the monthly interest charged on each balance together. The result is the total interest charged for the billing cycle (which is identified identifed on your billing statements as the “Total Interest For This Period”).