Credit Cards are convenient tools to help you manage your expenses. They let you save through various deals and reward points. However, if you are careless with its usage, you end up with unmanageable debt. When using a Credit Card, you should know how much debt you can afford and for how long. You should also determine the threshold at which Credit Card debt can become excessively costly due to potential hikes in interest rates. 

Banks provide these metal or plastic cards to customers to help them pay for purchases and withdraw funds from the ATM within an approved credit limit. You need to pay your bills every month to build a positive and reliable credit history, which automatically boosts your CIBIL score for better Loans in the future. To learn more about debt management, use the Credit Card EMI calculator, an online tool for calculating the minimum payment amount.

What is the EMI calculator?

When you apply for a Credit Card and use it to make payments, you can pay the bill entirely or convert the amount into a monthly EMI. A Credit Card calculator computes the EMIs, the applicable fees, and what the amortisation schedule will look like. You can also see the total interest amount.

You might face different variants, such as a Credit Card minimum payment calculator, interest calculator, and limit calculator. Every bank offers different calculators on its online platforms to help users decide on their Credit Card type and repayment capacity.

How does it work?

A Credit Card calculator requires you to enter the Loan amount, interest rate, and tenure. It uses the formula to offer results in monthly EMIs, the principal amount, the total interest amount, and the overall amount. Credit Card calculators also function as interest rate calculators by showing you the amortisation schedule. It uses a formula:

Equated Monthly Instalments = Principal amount x Monthly Interest Rate x [(1 + Monthly interest rate) ^ (Number of months)/ (1 + Monthly interest rate) ^ (Number of months-1)]. To use the Credit Card interest calculator, you need to visit the bank’s online platform, click on the calculator option, enter the Loan amount, select the interest rate and tenure from the slider, and get instant results as the total amount payable, EMI amount, interest amount, and the amortisation table.

How to calculate the interest charges?

The Credit Card calculator calculates the interest charges by entering the interest rate, principal amount, and Loan tenure. If you want to calculate Credit Card interest charges, you can use the formula:

Total interest cost = EMI x Number of months – Principal amount.

Conclusion

If you cannot afford to repay the Credit Card bill on the due date, convert the repayment amount into EMIs and pay interest for this facility, just like a Bank Loan. This interest rate is calculated monthly since Credit Card debt is for the short term.