How to calculate your monthly credit card payment?

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How to calculate your monthly credit card payment?

Postby tharwatq » Sat Dec 17, 2011 6:29 pm

Hello all,

I live in Jordan but my friend lives in the US and he has a credit card issued by the Bank of America, he told me that the APR for his credit card is 11.24%.

He wants to buy a laptop for me using his credit card, it costs $1050. Can you tell me how to calculate the monthly credit card payment in order to pay off the purchase within 1 year?

I checked some online credit card payoff calculators but some of them are different from each other, so I am not sure which one applies to my conditions.

One example, I put the balance amount "1000", the APR "11.24" and the monthly payment "90" it gave me that it will take me 12 months to fulfill the amount with 80 US dollars interest. So is that correct?

Of course, my friend will make other purchases after buying the laptop, and as I know, the charge the interest daily (or something like that), but what I want to know if there is a way to calculate the monthly payments over a year on the laptop ONLY.


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Postby Pete838 » Sun Dec 18, 2011 8:42 am


Your monthly payment on the $1,050 laptop ONLY is $92.92 to pay off in one year (12 monthly payments, all on time). During that time the amount of interest paid will be $65.02. If you pay off the bill sooner the interest would be less, but that would be impossible to calculate unless I knew the dates and amounts of every payment.
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Postby DoingHomework » Mon Dec 19, 2011 4:33 pm

What Pete said is correct.

The problem is that if your friend makes any other purchases on the card while you are paying it off he will incur more interest. For example, if he spent $100 during a specific month and paid it off when it was due at the end of the month he would end up paying a month's interest on that money because of the amount he is holding for you. If your laptop were not being financed then he wouldn't have to pay that. My suggestion would be to simply pay him extra interest, perhaps 15% to make up for the uncertain extra amount you will cost him. Once you work out what that interest rate will be then you can figure out what the payment needs to be. Alternatively you could just pay him a fee up front for making the purchase for you then you make the payments. Maybe give him $100 up front then make monthly payments of $92.92 for a year. The extra is what he gets for carrying you.

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