what will the last payment be to pay off a 1250 computer
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Credit Cards
A credit carte is a small plastic carte issued by a bank, business, or other organization, allowing the holder to make purchases or withdrawals on credit, which is a class of unsecured loan from the issuer. At that place is a maximum amount of credit that a card can provide, called a credit limit, which should non be surpassed. Exceeding the limit may require the credit card holder to pay a credit limit fee. At the end of the calendar month, the credit carte du jour holder can cull to repay the entire amount or get out an unpaid balance that is subject to interest until it is paid off. Note that credit card interest rates tend to be relatively high compared to other common loans such as mortgages, auto loans, or student loans, and equally such, the rest should ideally exist paid off monthly to avert paying big amounts of interest. Examples of credit menu issuers include banks, credit unions, or retailers, and examples of credit card networks include Visa or MasterCard. American Express and Find are both issuers and networks. Networks accuse a small fee (<3%) for handling the processing of the transactions. Issuers profit from interest payments on revolving balances, late fees, annual membership fees, fees for cash withdrawals, interchange fees, etc.
APR
Different cards offer varying rates of interest, often referred to as the almanac percentage rate, or APR. Some cards have variable APRs, based on specific indexes, and others have fixed APRs. There are some credit cards that are specifically advertised as having a zero, introductory, almanac percent rate (APR).
Cash Advances
It is possible to withdraw credit from a credit card for physical cash. This is chosen a cash advance, and they usually have very loftier APRs. There is no grace menses as interest accumulates immediately, cash advances don't count towards rewards, and there is unremarkably a greenbacks advance fee. On top of that, the ATM used will probably too accuse a fee. Commonly, credit card greenbacks advances are not very advantageous, and should generally exist reserved for emergencies.
Balance Transfers
It is possible to transfer the balance from one credit card to another. People who behave revolving credit calendar month-to-month can probably consider applying for a favorable balance-transfer credit bill of fare, normally in the form of one with a depression or zippo introductory charge per unit. For instance, a spender who has accrued lots of debt on a high-interest rewards credit carte may desire to employ for a credit card geared for balance transfers, which commonly comes with a menstruation of interest-free accumulation of debt. The interest-gratuitous period is generally 6-21 months, after which the credit card will require payment of involvement on top of the main. Some cards can charge a fee of 3% or 4% of the total corporeality transferred. Attempt to avoid these unless the low or zippo interest provides a bigger financial incentive to do so. Balance transfers generally exercise non count towards rewards or cashback features.
Most people also have debit cards that look and function very similarly to a credit card. Banks or fiscal institutions provide debit cards with checking accounts, which let purchases or withdrawals to exist made that are deducted direct from the checking account. In that location is unremarkably no fee associated with debit card purchases or withdrawals except nether certain circumstances such equally use in a strange state or withdrawals from third-party ATMs.
Advantages
Different types of credit cards (each type is in a section beneath with more details) have different advantages. Some of these are listed below.
- Used equally a Loan—Spending with a credit card is spending on credit, meaning that the money is borrowed. If the cardholder needs to make a buy, but for some reason may non take sufficient funds, they may pay for it using a credit card, and pay back the borrowed amount later.
- Safety and Convenience—Carrying a credit bill of fare is more user-friendly than a wad of greenbacks and pocket full of coins, and also safer because theft is less likely in situations involving a credit menu rather than greenbacks. Transactions made on a stolen credit card are not the liability of the cardholder (if they notify the issuer immediately that their card was stolen), whereas stolen cash ends upwards as a loss in almost all cases.
- Fraud—When a fraudulent charge is involved, the issuer, non the credit card holder, is liable for fixing the state of affairs. Nether the Fair Credit Billing Human action (FCBA), a credit menu holder'southward maximum liability for fraudulent transactions is $fifty, although most credit cards take null liability for all fraudulent transactions. This tends to be a very handy perk to have in situations where the bill of fare is stolen, the holder has unknowingly made a transaction with a fraudulent merchant, or when disputing a transaction. In the case of a debit card, the holder will likely go through the difficult job of sorting out these situations themselves in order to call back the lost funds.
- Discount on All Purchases—While most debit cards do not have a cashback perk on all incurred transactions, information technology is somewhat mutual for credit cards to behave a discount, such as 1%, in the form of cashback on transactions. Some even become every bit high as ii% or more. If a person pays off all their expenses (groceries, utility bills, etc.) on such credit cards, they finer receive a disbelieve on everything. As an example, if a person has monthly expenses of $3,000, by using a 2% cashback credit card, they will save $720 a yr merely past using information technology.
- Purchase Protection—Well-nigh all credit cards offer some sort of purchase protection, and they are put in identify to protect the cardholder against specific transactions. Types of purchase protection vary from network to network, and purchases must be made on the specific credit menu in club for protection to apply. The following are some examples of purchase protection:
- Re-pricing of goods that have since dropped in price.
- Removal of holder liability for purchased goods that are damaged, defective, lost, or stolen. Claiming an item as lost or stolen requires a clear indication of loss or theft, and the latter will unremarkably involve a police report. Not all items are covered, and it is best to consult the terms and agreements or contact the customer service section of the issuer for more details.
- Extension of the length of the original manufacturer'due south warranty, ordinarily for i or two years. The limit on each claim is typically $x,000 with a $50,000 annual cap on the entire account. By and large, the purchased items must be new (not used or floor models), and the original manufacturer'south warranty must not cover a period longer than 12 months.
- Refunding an item if the merchant won't accept the asking for a refund. In most cases, issuers allow threescore to 90 days to file a asking, and certain items such as jewelry, perishables, and tickets are not covered.
- Perks—Credit cards also tend to come with certain perks that vary from issuer to issuer and credit card to credit card. In general, credit cards with annual fees will have more perks, and each perk will take more benefits. For instance, a credit menu with no almanac fee may provide basic roadside assistance such as towing, tire replacement, and bound-starting a vehicle, just a $450 annual fee card may additionally include fuel delivery, locksmith services, and bombardment replacement. Perks may be any of the post-obit:
- Rental insurance—Auto rentals tin can be insured, and a credit card can be used to pay for car rental insurance if the entire price of the rental is charged to that specific credit bill of fare.
- Concert tickets—Some credit cards may offer presale concert tickets to card members well earlier they are actually available to the public for purchase. This comes in handy for extremely sought-subsequently tickets that tend to be sold out chop-chop.
- Roadside assist—Many credit cards offer emergency help for carte du jour members who notice themselves stuck on the side of the road, similar to an AAA membership (offered in the U.Southward.) that requires an almanac fee.
- Travel insurance—Oftentimes, travelers may discover that they demand to cancel or delay a flying due to sickness or another situation. This usually results in a financial loss that can't exist recuperated, just some credit cards offer trip cancellation perks as long as the trip was paid for using that specific credit bill of fare.
- Luggage—Lost or stolen baggage may be covered if the entire purchase was paid for by a credit card with lost luggage protection. As well, some credit cards help waive checked bag fees. These perks are generally found more with travel rewards cards.
- Free Admission—Admission to museums, fine art galleries, botanical gardens, and other venues may be gratuitous of charge to certain cardmembers. Free admission is generally limited to the first weekend of the month.
- Improve Credit Rating—By using a credit card responsibly, one can as well improve their credit rating, resulting in drastic savings through more than favorable loans when the fourth dimension comes to buy a car or home. Generally, the amend a person'due south credit score, the ameliorate the range of credit cards they will authorize for. Excellent credit allows access to credit cards with generous rewards rates, a plethora of perks, and the lowest rates.
Disadvantages
Impulsive utilize of credit cards can crusade people to discover themselves in financial trouble. Information technology is understandably like shooting fish in a barrel for credit card holders to utilise them recklessly and to be suddenly confronted with payments that tin can't be met each month. This is playing correct into the hands of the issuers because they make their profits from insolvency. Non only volition this spell financial trouble for well-nigh people, but their credit scores will too exist affected negatively due to late or missing payments.
In the case that a credit card holder falls very securely into debt, debt consolidation, which is a method of combining all debt under a new line of credit, tin can offering temporary relief. For more information or to practise calculations involving debt consolidation, please visit the Debt Consolidation Calculator. However, for the average Joe, the well-nigh effective approach is probably to scale back standards of living and piece of work diligently towards paying back all debts, preferably starting on the highest APRs first. People who detect themselves in this situation should also consider getting a secured credit menu and using it in a responsible manner to immediately begin repairing their damaged credit score. For more data about or to do calculations involving paying off multiple credit cards, delight visit the Credit Cards Payoff Computer.
Although undisciplined employ of credit cards can result in significant debt, when credit cards are used responsibly, they tin can be an excellent payment method.
Types of Credit Cards
Unlike types of credit cards adapt the needs of dissimilar types of spenders. For simplicity, it would exist wise to find one that aligns best with the user's financial intentions; for case, a person who is non an improvident spender and not interested in anything except getting the best bang for their cadet tin probably live with just a no-fee cash dorsum card. However, it is very possible for people to carry multiple credit cards for their different advantages, even if information technology requires a bit of management. What's important is that they are all paid off in a timely manner.
Cashback: These offer cashback on all purchases, normally 1%, 1.v%, or 2%. Another type may accept up to 5% cashback on selected categories of merchandise or services, which commonly rotate quarterly.
Rewards: These make up the majority of near credit cards. The types of rewards ordinarily range betwixt airline miles, hotel bookings, and dining benefits. Credit cards that offer more rewards or miles will generally crave annual fees, and it is up to each spender to evaluate their spending habits to decide whether a no- or low-fee card with low rewards is preferable to a high-fee card with high rewards.
Charge: These usually work the same fashion as whatsoever other credit bill of fare, except that they have either no spending limits or very high limits, and balances cannot be rolled over from ane calendar month to the next. Information technology is expected for the holder to pay the balance in full at the end of every month. The merely real benefit of having one is the heavy spending a charge card allows; just brand sure to pay it in total at the end of every month.
Residual Transfer: These are all-time for spenders who plan on conveying lots of credit card debt in the hereafter because the interest rates on credit cards are quite high. It is possible to transfer an existing balance from one credit menu to another. Unlike most credit cards, some carry low, or even naught, introductory APRs for the first vi-21 months, which allows the holder to finer roll debt from one bill of fare to another without paying interest. Residue transfer credit cards are typically more useful for people who have significant amounts of existing debt on high April cards.
Secured: Secured credit cards are useful for younger people with no credit history who are interested in getting started or people with bad credit history. To be issued a secured credit card, the applicant must make a security deposit that acts as collateral; if they prove to exist financially responsible with the secured credit card and no longer wish to use information technology (as there are many other credit cards on the market to exist had that do non require a security deposit afterward the requisite credit score), they tin close the account and receive their deposit back.
Prepaid: A prepaid credit card is more alike to a debit card in that information technology is preloaded with an amount to be used, and cannot exceed this corporeality. In general, there are reloadable cards, multi-use cards, and single-employ cards. These are frequently given as gifts or mailed back from companies as compensation for rebates on their purchased goods.
Store: Some retail stores result credit cards that offer big discounts only at that item chain. They are unremarkably offered at section stores by a cashier during checkout and packaged with a discount similar 10% on the sum of purchases. These tend to be more useful for users that shop at the stores ofttimes enough to warrant their financial benefits. They likewise brand good options for people with bad credit looking to rebuild because they often accept lower credit scores relative to other credit cards. However, interest rates on shop credit cards are generally higher than other types of credit cards.
Business concern: There are some cards geared to help benefit business needs. They offer things such as discounts on products and services for the business organization, intricate ways to assistance track expenses, emergency travel assistance, medical assistance, and travel agent services. Business concern credit cards are useful for separating personal expenses from business expenses when it comes time to practise taxes.
How to Calculate Interest Charges on Credit Cards
Average Daily Residuum Method
The virtually widely used method credit bill of fare issuers use to calculate the monthly interest payment is the average daily balance, or the ADB method. Since months vary in length, credit card issuers use a daily periodic rate, or DPR, to calculate the interest charges. DPR is calculated by dividing the APR by 365, which is the number of days in a yr.
| Daily Periodic Rate, DPR = |
So discover the ADB. The equation for finding this is a scrap more tedious, but but add up all the balances for each day in the statement billing cycle and divide by the total number of days in the billing cycle.
| ADB = |
|
Finally, multiply this by the Daily Periodic Rate calculated before information technology and the number of days in the billing cycle to determine the involvement for that month'due south statement.
Monthly interest payment = DPR × ADB × number of days in the billing bike
Example: Jon needs help computing the involvement payment for one of his credit cards in the month of June. Information technology carries an APR of 15%. Calculate his DPR using the equation above:
During the first 15 days of the June billing cycle, in that location was a remainder of $500. Midway through the month, Jon made a payment of $100, so the remaining xv days had a residual of $400. Calculate his ADB utilizing the equation higher up:
Multiply the DPR, ADB, and number of days in the billing bike to find the monthly interest payment:
Monthly interest payment = 0.00041 × 450 × 30 = $5.54
Jon'south interest payment for the month of June is $v.54.
There are several other means in which credit card issuers summate the monthly interest payment, including the previous residue method and the adjusted residual method, though they aren't used all that frequently.
Previous Rest Method
Multiply the DPR by the previous calendar month's balance past the number of days in the billing cycle. Bold that Jon's balance at the end of the previous month was $300:
Monthly interest payment = 0.00041 × 300 × 30 = $3.69
Adjusted Balance Method
Multiply the DPR by the adapted balance, which is the previous calendar month'south balance less payments made. So multiply that result by the number of days in the billing wheel. Assuming that Jon'south balance in May was $300, but he made payments totaling $200:
Monthly interest payment = 0.00041 × (300 - 200) × 30 = $1.23
The calculation of monthly payments volition lead providers to charge a minimum payment, which is more often than not an interest payment. Information technology is important to make this payment. Failure to do so may lead to a counterfoil of the card, legal proceedings, and a steep drop in the credit rating of the holder.
Unless a credit card has a cypher or low introductory Apr, interest on the balance is quite loftier. Credit card APRs average about 20%, which is relatively high for any loan. Adept APRs average about 8-12%, though it is possible for someone with excellent credit to get even lower rates. This is because credit bill of fare debt is unsecured, meaning there is no collateral bankroll the loan. If the borrower defaults, the lender cannot seize any assets, and this chance is reflected in the loftier involvement rate. Secured debt, in comparison, requires collateral, such as real manor. If the borrower defaults on the secured debt, the lender tin can forestall and accept possession of the real manor.
Source: https://www.calculator.net/credit-card-calculator.html
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