I've perhaps answered my own question, but I would sincerely appreciate anyone with the requisite knowledge to confirm or refute my very simple answer to my own question. First, I understand, you have to make some assumptions to get at the answer. So, my assumptions are: 1) The credit card issuer "bank" uses a 365 day year 2) That on average, the bank assesses me interest for 30.4167 days per month 3) For simplicity, I assume my average balance remains at $430.38
If those assumptions are reasonable, my monthly interest is $8.75 = ($430.38 x (24.40%/365) * (365/12))
BUT since I am also assessed a monthly fee of $8.25, that means the total finance charges per month are $17.00 ($8.75 + $8.25)
Which in turn means that the APY = ($17 / $430.38) * 12 or 47.40%!
Sounds outrageous but it appears to be completely reasonable based on pretty simple and sensical math. This card within the month will be paid off regardless, but what I found fascinating in my internet searches was that this calculation was stated to be very difficult and no one addressed this specific situation of interest AND monthly fees in calculating an approximate APY.
I understand I had to make some assumptions that weren't entirely realistic (I've been reducing the average balance), but even by reducing the balance, I don't believe that would materially affect the APY - correct? I don't care that this is one of many "banks" that has offshored their support, but on direct confrontation with one of their "account managers" tonight, they agreed to waive the monthly fee for 3 months and reduce the interest rate to 15.90% (no lie).
Would still greatly appreciate any insight from the board members!
