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How does a credit card company calculate finance charges on a credit card?

How does a credit card company calculate finance charges on a credit card?
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How does a credit card company calculate finance charges on a credit card?

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User Kabira K
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A common way of calculating a finance charge on a credit card is to multiply the average daily balance by the annual percentage rate (APR) and the days in your billing cycle. The product is then divided by 365 . Mortgages also carry finance charges.
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User Mmoossen
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