Finance charges on a credit card are what the bank charges cardholders to carry a balance, use services or extend services such as late fees or duplicate cards. An easy method of controlling these finance charges is knowing how to calculate the finance charge on a credit card. This is a simple set of calculations by knowing which pieces of information are needed. The information for this can be found on the credit card statement.

Finding Interest Rate Information

The current interest rate information is found using the last statement from the financial institution which contains the current balance owed on the account at the end of the billing cycle. Determining the interest rate on the credit card balance is not the same as determining APR. This information is found on the back of the credit card statement; the calculations use either a 360 or 365 day year depending on the billing cycle the institution uses. If this is unclear a 365 days per year with a 30 day billing cycle should be used.