Credit card interest compounds daily. If you pay the full statement balance by the due date you pay no interest on purchases thanks to the grace period – carry a balance and you lose it.
How to use the Credit Card Interest Calculator
- Average daily balance
- APR
- Days in the billing cycle
- Monthly payment
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the average daily balance, APR, days in the billing cycle and your monthly payment.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Average daily balance | Amount in your currency |
| APR | In % |
| Days in the billing cycle | A number |
| Monthly payment | Amount in your currency |
What each result means
- Daily periodic rate = [APR]÷365
- Interest this billing cycle = [Average daily balance]×[APR]÷100÷365×[Days in the billing cycle]
- Interest over a year at this balance = [Average daily balance]×((1 + [APR]÷36500)^365 – 1)
- Months to pay off = nper([APR]÷1200, [Monthly payment], [Average daily balance])
- Total interest until paid off = [Monthly payment]×[Months to pay off] – [Average daily balance]
Example values
How the main result changes when Average daily balance changes and everything else stays at the example values above:
| Average daily balance | Interest this billing cycle |
|---|---|
| 1,500 | 29.59 |
| 2,250 | 44.38 |
| 3,000 | 59.18 |
| 3,750 | 73.97 |
| 4,500 | 88.77 |
| 6,000 | 118.36 |
Formula
Daily periodic rate = APR ÷ 365Interest for the cycle = average daily balance × daily rate × days in cyclePayoff months = nper(APR ÷ 12, payment, balance)Worked example
Inputs — Average daily balance: $3,000; APR: 24 %; Days in the billing cycle: 30; Monthly payment: $120.
Results — Daily periodic rate = 0.0658 %; Interest this billing cycle = $59.18; Interest over a year at this balance = $813.45; Months to pay off = 35; Total interest until paid off = $1,200.33.
Frequently asked questions
How do I avoid credit card interest?
Pay the full statement balance by the due date every month.
What is the daily periodic rate?
APR ÷ 365 – the rate applied to each day's balance.
Does interest compound on credit cards?
Yes, usually daily.
What formula does the Credit Card Interest Calculator use?
Daily periodic rate = APR ÷ 365.