Parents/adult persons/credit scorers will stiffly tell you to curb spending on your credit cards. We at Splurgist.com just wish for you to splurge rewardingly. When interest charges negate your card earnings, you are not being properly compensated for carrying out splurgist duties.
To calculate how much of a hit you’ll take on when carrying a balance, first divide the Annual Percentage Rate (APR) by the number of days in a year for a Daily Percentage Rate (DPR). Then, plug the following:
balance x DPR x number of days in billing cycle = interest for that month’s statement.
For example, I had to carry a $1300 balance this one time.
$1302.73 x (0.1774/365 days) x 31 days = $19.63
While that card has a rewards earn rate of 1% or something, the interest was effectively 1.5%. I was 0.5% under. 😫
And some card policies have a minimum cost to carry a balance. For example, if I leave just 5 cents unpaid on certain cards, the minimum interest charge will be no less than $5.
I’m going to negotiate lower APRs with the banks sometime…