Could someone help me out with this? Suppose my balance is 3000, how much do I have to pay if APR is 2.9% or 12.9%? I received a new card offering (introductory APR 2.9%), it has a table like this:

Balance....Your APR....APR........You Save
==========================================
$3000......2.9%........12.9%......$206

I don't quite understand how they give this figure. Thanks in advance.

Sally

Remember, that as you pay down your credit card by making the monthly payment there will be less of a balance on which to charge interest. So, figuring out the actual amount that you would save would require us knowing the amount of each month's payment.

The interest is most likely calculated on the average daily balance (ADB) which would be the APR divided by 365 (days in the year).

For an easy comparison, if you just take the flat $3,000 and calculate simple interest for the year in one shot you would end up paying $387 at 12.9% and $87 at 2.9%. So, most likely the chart you have referenced is calculating the difference on a declining balance.

Hope this helps!

The_Insider