The ending balance method of calculating your finance charge uses the balance at the end of the billing cycle. Your beginning balance is adjusted based on payments, credits, and new charges. The periodic rate is applied to this new balance.
APR = 14%
Periodic rate = 1.17%
Days in billing cycle = 30
Previous balance = $1000
Payment 16th day = $100
Charge 20th day = $50
Ending balance = $950
Finance charge = Ending balance * periodic rate
= $950 * .0117
= $11.12
Ending Balance Method of Calculating Finance Charges
By LaToya Irby, About.com Guide
Explore Credit / Debt Management
Must Reads
About.com Special Features
10 Things You Can Do Today to Improve Your Credit
Easy steps to take control of your credit card debt. More >
Holiday Central
What to eat, where to go, fun things to do and how to save money on the perfect gifts. More >
©2009 About.com, a part of The New York Times Company.
All rights reserved.