Cyclic interest on credit cards is quite common. This interest actually refers to the interest generated when the credit card holder recovers the credit card limit. Nowadays, many people like to spend by credit card. As we all know, credit cards can be repaid after consumption, and cardholders enjoy an interest-free period. Generally, the longest interest-free period is 50-56 days. If the cardholder uses a credit card and repays before the repayment date, no interest will be charged. If only the minimum repayment amount is paid on the repayment date after using the credit line, the bank will charge the cardholder with cyclic interest; Credit cards have the function of borrowing cash in advance. If you use a credit card to advance cash, the cardholder does not enjoy an interest-free period. From the date of borrowing, interest will be charged at the rate of five ten thousandths of the daily interest until the user pays off all debts.

How to calculate cyclic interest

When a credit card holder uses a credit card to withdraw cash or fails to repay in full before the repayment date, it will generate cyclic interest, with a daily interest rate of 0.5 ‰ and compound interest on a monthly basis until the cardholder fully repays the arrears. Cyclical interest = default principal × interest rate × days from consumption billing date to current repayment date+(repaid principal) × interest rate × days from current repayment date to next billing date.

For example, the cardholder's monthly billing date is 10, and the repayment date is 27th. If the cardholder spends RMB 3,000 on September 1 day and enters it into the account on September 2, then the bill payable on September 10 is RMB 3,000. If the cardholder pays off in full on the 27th of the repayment date, no interest will be charged. However, if the cardholder only pays off the minimum repayment amount of 300 yuan, the interest is: 3000 * 0.05% * 25+(3000-300) * 0.05% *13 = 55.05 yuan.

If cardholders use credit cards to withdraw cash, they also need to charge interest. If 3000 yuan is withdrawn, it will be repaid after 20 days, and the interest is: 3000 * 0.05% * 20 = 30 yuan.

At present, most banks' credit cards will pay full penalty interest if they are not repaid in full on the repayment date. However, ICBC has not paid the penalty interest in full at present. If the borrower repays the outstanding amount, it will only charge interest on the outstanding amount. If the cardholder uses ICBC's credit card to spend 5,000 yuan, the cardholder only pays back 2,000 yuan on the repayment date, and the remaining 3,000 yuan is paid back after 10, then the interest is: (5000-2000) * 0.05% *10 =15 yuan.