1) How are monthly payments determined? 2) When does... - Other Questions


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Credit Card Applications » Questions » User Questions » Other » 1) How are monthly payments determined? 2) When does the clock start ticking on 0%? At time of application...

1) How are monthly payments determined? 2) When does the clock start ticking on 0%? At time of application or when first transaction posts?

Answered on | Updated on July 28th, 2017
The content is accurate at the time of publication and is subject to change.

Monthly payments are determined based on your credit card balance, fees, and interest rates. Every bank uses their own formulas to calculate a minimum payment and here’s an example of a minimum monthly payment. If the card balance is below certain amount, say it is $25, your minimum payment will be equal to your balance. Otherwise, the minimum payment will be $25 or 1%-2% of your balance plus new interest and fees. Thus if you have a credit card with a 0% intro APR, your minimum payment will be 1%-2% of your balance plus fees. If you want to pay off the card balance in full by the end of the zero introductory period, then you should divide your card balance by the number of months to get your monthly payment. Note that if you continue making purchases during the introductory period, you should take them into account as well.

As for the 0% interest, it starts once you are approved for the card and activate it. If you make a purchase in two months after approval, you will have two months fewer to pay off the card balance at 0% interest. You can find popular 0% intro APR credit cards on our website.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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