18% percent compounded daily? or compounded monthly? please help?

k thanks for lookin,

now one bank鈥檚 credit card charges a nominal annual rate of 18 % compounded monthly

another Bank offers a credit card with nominal annual rate of 18% compounded daily,

which of the two, has the most competitive credit card?

how comes

18% percent compounded daily? or compounded monthly? please help?fha loan

I would say compounded monthly is better.

Since the credit card company will add up interest on monthly basis.

On the other hand, the daily compounded interest will add up every day and it will compounded on daily basis.

18% percent compounded daily? or compounded monthly? please help?

loan

Assuming all other terms are exactly the same, the less frequent compounding means lower overall interest charged. The difference is not that large. Assuming a steady amount, the finance charge per month will be 1.5% for monthly compounding and 1.511% for daily compounding.

It%26#039;s worth mentioning that the devil is in the details, and there are lots of other little details that can have a far greater effect than compounding method. For example, grace period, method of computing the average balance, rate changes, etc. can have a much more dramatic effect on what you actuall end up paying in finance charges.