If you own a credit card, chances are you might have noticed interest charges on your account every month. That is because you currently hold a balance on your credit card that needs to be paid.
Don’t worry, you aren’t the only one, in fact, half the American credit cards out there must pay interest because they have a balance on their account. Continue reading if you’d like to learn how to make the best financial decisions and to learn How Credit Card Interest Work!
| Account | Minimum Open | APY | Review |
|---|---|---|---|
| Ponce Bank 4-Month No Penalty CD | $1 | 4.41% | Review |
| Sallie Mae 10-Month No Penalty CD | $1 | 4.25% | Review |
| CIT Bank No Penalty CD | $1,000 | 4.10% | Review |
| America First Credit Union Flexible Certificate Account | $500 | 4.35% | Review |
| Citi No Penalty CD | $500 | 4.05% | Review |
| USALLIANCE Financial No Penalty CD | $500 | 4.00% | Review |
| Ally Bank No Penalty CD | None | 3.85% | Review |
| Marcus by Goldman Sachs No Penalty CD | $500 | 3.85% | Review |
| Marcus by Goldman Sachs No Penalty CD (For AARP Members) | $500 | 3.85% | Review |
| Synchrony Bank No Penalty CD | None | 3.50% | Review |
| Bellco Credit Union Smart Move CD | $2,500 | 3.40% | Review |
| My eBanc Flex Time Deposit CD | $10,000 | Up to 3.20% | Review |
| Workers Credit Union No Penalty CD | $500 | 3.05% | Review |
What Is My Interest Rate?
Any credit card purchases you make will be accompanied by a standard interest rate called the Annual Percentage Rate, or APR. This amount will vary depending what card you use and the credit score of the person. Although APR is expressed in years, credit card companies will use it to calculate charges on your monthly credit card payments. The APR can vary and can be used for longer or shorter time periods.
How Is It Calculated?
If you’d like to keep track of how much interest you’re paying, there are some ways to calculate that interest. First, divide your APR by 365 to convert it into a daily percentage rate. At the end of each day, multiply your current balance of your credit card by the daily rate to figure out your daily interest charge. That charge will be added to your balance the next day, a process known as compounding.
When Is The Best Time To Pay?
Here’s a huge secret about credit card interest: credit card companies usually give a grace period to their customers. Basically, during the grace period, the credit card company will not charge you interest on any purchases you make if you pay your entire balance by the due date of each month.
On the other hand, if the cardholder does not make a complete payment of their balance by the due date, the cardholder gives up their grace period, and the interest charges will show up on the next statement. Check your cardmember agreement for the specifics. Here are some more important facts to make a note of:
- Separate interest rate expenses and charges can appear on a cardholder’s cash advance balance and balance transfer balances. Additionally, many credit cards will actually charge cardholders a higher penalty interest rate if they fail to make payments.
- Most credit card variable interest rates can actually change with Prime Rate, which is an interest rate that is three percentage points above the federal funds rate, which is determined by the Federal Reserve Bank. This rate can increase, so cardholders should gather interest charges that they cannot comfortably afford to pay.
Bottom Line
Credit Card Interest can sneak up on you and add unnecessary costs to your bill on top of the things you already have to pay for. Avoid with the tips provided above! Learn some of the basic ways credit card companies charge you interest and why they even appear on your bank statements.
This post gives you the tools you need to start your decision making process in choosing a new credit card that’ll benefit you. Interested in a variety of credit cards? Check out our list of the latest Credit Card Promotions!
 | BMO Harris PremierTM Checking: Earn $350 cash bonus when you open a new PremierTM Checking Account and have a total of at least $7,500 in qualifying direct deposits within the first 90 days. Learn More---BMO Harris Premier Checking Review |
 | U.S. Bank SmartlyTM Checking: Earn up to $600 bonus when you open a new U.S. Bank SmartlyTM checking account and a Standard savings account and complete qualifying activities. Subject to certain terms and limitations. Offer valid through February 7, 2023. Member FDIC. Apply Now---U.S. Bank Checking Review |
 | Discover Online Savings Account: Earn $200 Bonus/$150 Bonus with promo code HMB323 by 03/15/2023 along with a competitive interest rate of 3.30% APY. Fund your first savings account with a minimum of $25K within 30 days of account open date to earn the $200 Bonus (fund $15K to earn $150 bonus). No minimum opening deposit, no minimum balance requirement, and no monthly fees. See advertiser website for full details. Apply Now---Discover Savings Review |
 | HSBC Premier Checking Account: Earn $500 bonus for eligible new customers who open a new HSBC Premier checking account and complete the following qualifying activities. Make recurring monthly Direct Deposits totaling at least $10,000. Member FDIC Terms |
 | Chase Private Client: Enjoy a $2,000 bonus when you open a new Chase Private Client Checking account with qualifying activities. Within 45 days of coupon enrollment, transfer a total of $250,000 or more in new money or securities to a combination of eligible checking, savings and/or investment accounts (excludes Chase business checking and savings accounts, any J.P. Morgan Self-Directed Investing & Automated Investing, J.P. Morgan Personal Advisors Accounts, J.P. Morgan Wealth Management retirement accounts and CDs), and maintain the balance for at least 90 days from coupon enrollment. Learn More---Chase Private Client Review |