Formula to figure credit card payments



Is it possibe to figure out monthly credit card payments since the finance
charges differ from month to month and the amount paid monthly may differ.
Lets say I have credit card with 7.99% APR a balance of $9500.00 and a
minimum monthly payment of $200.00. I don't always pay the minimum, but never
less, I would like to be able to start with the balance in one cell enter my
payment in another and have it subtract the payment from the balance then add
the monthly finance charge to come up with a new monthly minimum. I looked at
PMT & PV but they don't appear to what I need.

Thanks In Advance for you help



Fred Smith

You're right, PMT and PV are not applicable here. Just do the calculations
yourself. As you said, the first column is Opening Balance, 2nd is Payment,
3rd is Interest Charged, and 4th is Closing Balance.

In each row, Opening Balance is Closing Balance of the previous row.
Closing Balance will always be =OB-Pmt+Int

To calculate payment, you would need to know the rule for your credit card.
It could be something like 3% of the monthly balance. Hopefully, your credit
card agreement specifies the calculation. Put this calculation in each row,
then if you pay something other than the minimum, manually enter it to
override the calculation.

The interest charged can also be tricky. Many credit cards charge interest
from the date of the purchase, not the date it was posted to your statement.
If you're not adding any charges each month, the interest charge should be
=OB*7.99%/12. But, your card might charge based on the actual number of days
in the period (which could be slightly more or less than a month), and might
compound differently. In this area, you'll probably have to be satisfied
with "close enough", then adjust manually when you receive your statement.

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