Infographic describing how credit card interest works

How Credit Card Interest Works

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We’ve always stated on this blog that we don’t believe that credit cards are all bad. When used sensibly they can offer extra protection when making online purchases, can offer a low cost way to spread the cost of other necessary purchases (just as long as you make your repayments on time) and it can also be handy to have one available for financial emergencies. Some credit cards even offer rewards to their customers which can really build up over time.

With all of the above being said, however, it is still really important that you find the right credit card for your circumstances and needs, so that you don’t end up paying extra interest that you don’t really have to. One confusing aspect of credit cards for many people can be credit card interest and how this works. With so many promotional rates on offer, it can be difficult to know which card to choose. Consumers are then faced with the problem of figuring out how credit card companies work out and charge interest to customers when you are not on any kind of special or promotional rate.

To help out in this regard, we’re sharing an infographic today from HSBC which explains in more detail how interest is worked out and charged on credit cards. The infographic attempts to explain what interest and APR actually are and also how interest is charged in practice. We hope you find the information of ‘interest’ (pardon the pun) and that it helps you to get a better grasp of the subject.

Infographic describing how credit card interest works

As we can see, credit card interest doesn’t have to be scary or baffling. Understanding how interest is charged on a credit card can really help you out when deciding how much to spend on a credit card and it can also inspire you to pay off any balances you have sitting on your current credit cards sooner. We hope you enjoyed the infographic and please feel free to share it using the buttons below if you think it could help out other people you know.

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