1. What is Credit Card Interest?

Credit card interest is the cost of borrowing money on your credit card. RBC calculates interest using your average daily balance, annual percentage rate (APR), and the number of days in your billing cycle.

2. How Does the Calculator Work?

The calculator uses the standard credit card interest formula:

Where:

• \( Average\ Balance \) — Your average daily balance in CAD
• \( APR \) — Annual Percentage Rate (as decimal)
• \( Days \) — Number of days in billing cycle

Explanation: The formula calculates daily interest by converting APR to a daily rate, then multiplies by the number of days.

3. Importance of Interest Calculation

Details: Understanding how interest is calculated helps you make informed decisions about credit card payments and debt management.

4. Using the Calculator

Tips: Enter your average daily balance in CAD, APR as a decimal (e.g., 0.1999 for 19.99%), and the number of days in your billing cycle (typically 30-31).

5. Frequently Asked Questions (FAQ)

Q1: How is average daily balance calculated?
A: RBC sums your daily balances and divides by the number of days in the billing cycle.

Q2: What's a typical RBC credit card APR?
A: RBC APRs typically range from 19.99% to 22.99% for standard cards (0.1999 to 0.2299 as decimal).

Q3: When is interest charged?
A: Interest is charged when you don't pay your full balance by the due date.

Q4: How can I reduce interest charges?
A: Pay your balance in full each month or make larger payments to reduce your average daily balance.

Q5: Does this include cash advance interest?
A: Cash advances may have different rates and immediate interest - check your card agreement.