Question 1

How is credit card interest calculated?

Accepted Answer

Credit card interest is calculated using your Average Daily Balance (ADB) multiplied by the Daily Periodic Rate (APR ÷ 365) for the number of days in the billing cycle. If you carry a balance, interest begins accruing immediately — there's no grace period.

Question 2

Is a balance transfer worth the fee?

Accepted Answer

A balance transfer is worth it if the interest saved during the promotional period exceeds the transfer fee (typically 3–5%). For example, on a $5,000 balance at 20% APR, you'd save ~$1,000/year in interest vs. a $150 transfer fee — well worth it if you can pay it off during the promo period.

Question 3

What is a minimum payment on a credit card?

Accepted Answer

Minimum payments are typically 1–3% of your outstanding balance, or a fixed amount ($25), whichever is greater. Paying only minimums means most of your payment goes to interest, and your balance barely decreases — leading to years of debt.

Question 4

How do I pay off credit card debt fastest?

Accepted Answer

Pay as much above the minimum as possible each month. Consider the avalanche method (pay highest-APR cards first) or apply for a 0% balance transfer card. Avoid carrying a balance month-to-month — the interest costs are enormous over time.

Name	Best For	Complexity	Key Feature
Credit Card Interest	Single card interest calculations	Simple	Month-by-month table
Balance Transfer	Evaluating a 0% transfer offer	Moderate	Net savings after fee
Minimum Payment	Seeing the cost of slow payoff	Simple	Minimum vs. fixed comparison

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