About the Credit Card Interest Calculator
This credit card interest calculator shows how much interest your card will charge on a balance you carry. Enter your average daily balance, the card’s APR and the number of days in the billing cycle to see the daily periodic rate, the interest for the cycle, what that balance costs per day, and what it would cost over a full year if nothing changed.
Most US card issuers calculate interest using the average daily balance method: they convert the APR to a daily periodic rate (APR ÷ 365), apply it to each day’s balance, and many compound daily, so the effective annual rate is a little higher than the APR. You can switch between daily compounding and simple daily interest to match your card agreement.
Use it to check a statement, understand why your balance barely moves, or see what carrying a balance really costs. If you pay your full statement balance by the due date, the grace period means you normally pay no interest on purchases at all.
With the default inputs, the interest this billing cycle is $62.23. Change any value above to recalculate instantly.
How to use the credit card interest calculator
- 1Find the average daily balance and APR on your statement (or use your current balance).
- 2Enter the number of days in your billing cycle, usually 28–31.
- 3Choose daily compounding unless your agreement says otherwise.
- 4Read the interest for the cycle and the daily cost of carrying the balance.
Formula and method
The card’s APR is divided by 365 to get the daily periodic rate (DPR). With the average daily balance method, the issuer averages your balance across every day of the cycle (ADB) and applies the DPR for each day. When interest compounds daily, each day’s interest is added to the balance, so the cycle charge is ADB × ((1 + DPR)^days − 1); with simple daily interest it is ADB × DPR × days.
The effective annual rate shows what daily compounding does over a full year: (1 + DPR)^365 − 1. The “APR ÷ 12” figure is a quick estimate many people use; it is close to, but not the same as, what your statement shows. Some issuers use 360 days — check your card agreement.
- APR
- Annual percentage rate for purchases
- DPR
- Daily periodic rate = APR ÷ 365
- ADB
- Average daily balance for the billing cycle
- days
- Number of days in the billing cycle
Worked examples
$3,000 at 24.99% over a 30-day cycle
The daily periodic rate is 24.99% ÷ 365 = 0.06847%. Compounded daily for 30 days on $3,000, that is about $62.23 of interest — roughly $2.05 a day. Left for a year, daily compounding makes the effective rate about 28.38%, or $851 of interest.
$8,500 at 21.49% over a 31-day cycle
A 21.49% APR is a DPR of 0.05888%. Over 31 days the interest on $8,500 is about $156.52 — about $5 a day. A year at that balance would cost roughly $2,037.
$1,200 store card at 29.99%, simple daily interest
Without compounding, interest is $1,200 × 0.08216% × 30 days = $29.58 for the cycle, and the annual cost equals the APR: $359.88 a year on a steady $1,200 balance.
Frequently asked questions
How is credit card interest calculated?+
Most issuers divide the APR by 365 to get a daily periodic rate, apply it to your balance each day of the billing cycle (the average daily balance method) and usually compound daily. The total is charged on your statement as the interest charge.
How much interest will I pay on a $3,000 balance?+
At a 24.99% APR, a $3,000 balance costs about $62 in a 30-day cycle, or roughly $2 a day. Over a year, with daily compounding, that is around $851 if the balance stays the same.
How can I avoid paying credit card interest?+
Pay your full statement balance by the due date every month. That keeps your grace period, so purchases are not charged interest. Cash advances and balance transfers usually do not get a grace period.
What is the difference between APR and APY on a credit card?+
APR is the simple annual rate. Because card interest compounds daily, the effective annual rate (APY) is higher — a 24.99% APR compounds to about 28.4% a year.
Why is my interest charge different from APR ÷ 12?+
Statements use the actual days in the cycle and your average daily balance, which changes with purchases and payments. APR ÷ 12 is only a rough estimate, so a 31-day cycle costs slightly more than a 28-day one.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.