## What is interest and how is it calculated?

Interest Overview

Interest is the cost of borrowing money from a lender for a certain amount of time. When you make a purchase with your Mission Lane Visa, we pay the merchant up front for you. Eventually, you pay your bill (which pays us back).

When Interest Accrues

Credit cards will accrue interest if you carry a balance from one statement to the next. Here’s what that would look like in two different scenarios:

• If you pay your full statement balance by your due date each month, we don’t charge you interest.
• If you pay only part of your statement balance (your minimum payment, for example), we will charge you a percentage of the money owed to account for the length of time borrowed.

How Interest is Calculated

If you’re carrying a balance from a previous statement period, we calculate interest by multiplying your daily interest rate, your average daily balance, and the number of days in the billing period.

If you wanted to calculate this yourself:

• Calculate your balance for each day by adding purchases (based on posting day) and deducting payments (based on the transaction day) of each day of the billing period, then add up the total
• Divide this total by the number of days in the billing period
• Now you have your average daily balance (you can check your average daily balance for purchases and cash on page 3 of your billing statement under the Balance Subject to Interest section)
• Next, take your APR and divide it by 365 to get your daily interest rate (if it is a leap year divide by 366) (Example: APR of 19.99% divided by 365 equals .0548%)
• Multiply your average daily balance by your daily interest rate
• Finally, multiply that result by the number of days in the billing period and divide by 100 (this converts the result to a dollar figure rather than a percentage).

Interest rates vary across Mission Lane cards. Sign into your account to see your Cardholder Agreement to learn more about your interest rate.

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