Answer and Explanation:
You will be charged credit card interest on the outstanding balance. Your credit card interest is added to your outstanding balance for each day past your due date of payment(after the month you didn't pay the full amount)
You made a purchase of $750 and paid $150 and so you have an outstanding balance of $600. This outstanding balance will be charged interest on daily basis. Let's assume your APR(your annual interest over 12 months) is 24%, your interest is broken down into months and then days. Your monthly interest is therefore 24/12= 2% and your daily interest = 0.02/30 = 0.00067= 0.0067% per day.
Based on this assumption, you will be charged 0.0067% interest on your outstanding balance each day till you make full payment(interest + outstanding balance)
The following explanation is the way that credit card interest works. You can expect your credit card liability of $750 with an initial payment of $150 before the due date to continue increasing daily.
If you assume an Annual Percentage Rate of 12% on the credit card, the monthly rate is 1%, while the daily percentage rate (DPR) is 0.0329% (12%/365).
With the initial settlement of $150 made, the credit card balance reduces to $600 ($750 - $150). Daily the card company will add 0.0329% interest to the balance until you pay off the debt.
Thus, credit card works with a daily percentage rate, which is the annual percentage rate divided by 365 days.
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