How can I calculate the % of balance paid in a month for a credit card user

Question

In my credit card accounts dataset I have the current month end balance, previous month end balance, month end interest amount, and month end payment amount. How can I figure out the % of balance paid for each accounts using these values? Also, I want to consider the case when the account has a 0 or negative account balance too.. That's when the account has a debit, rather than a credit balance. Thank you!

Answer 1

To calculate % of balance paid.

I assume

1. there is a customer and a credit card company, and
2. any negative 'flow' amount describes an increase in what the customer owes
3. any negative 'stock' amount means that at that time the customer owes the company.

Suppose your variables are

• CURRENT_MONTH_END_BALANCE,
• PREVIOUS_MONTH_END_BALANCE,
• CURRENT_MONTH_END_INTEREST_AMOUNT,
• CURRENT_MONTH_END_PAYMENT_AMOUNT,
• CURRENT_MONTH_TOTAL_NEW_TRANSACTIONS.

So (usually)

• CURRENT_MONTH_END_BALANCE < 0, (the customer owes the company),
• PREVIOUS_MONTH_END_BALANCE < 0
• CURRENT_MONTH_END_INTEREST_AMOUNT < 0 (interest means the customer owes more)
• CURRENT_MONTH_END_PAYMENT_AMOUNT > 0 (customer sends money which reduces their debt)
• CURRENT_MONTH_TOTAL_NEW_TRANSACTIONS < 0 (customer buys new things which increases their debt).

I assume 3. that the CURRENT_MONTH_END_BALANCE includes the new transactions for the current month and the interest for the current month and the payment for the current month, so that CURRENT_MONTH_END_BALANCE = PREVIOUS_MONTH_END_BALANCE + CURRENT_MONTH_END_INTEREST_AMOUNT + CURRENT_MONTH_END_PAYMENT_AMOUNT + CURRENT_MONTH_TOTAL_NEW_TRANSACTIONS.

I would calculate "% of balance paid" as IF(PREVIOUS_MONTH_END_BALANCE<0,CURRENT_MONTH_END_PAYMENT_AMOUNT / -PREVIOUS_MONTH_END_BALANCE,"Not calculated")

i.e. for the consider the case when the account has a 0 balance or if the company owes the customer I would not calculate the % paid.