Credit Card Interest Calculator
Calculate daily, monthly, and yearly interest charges on your credit card balance with detailed payment analysis
Specifications
Outstanding balance on your credit card
Annual percentage rate on your credit card
Fixed amount you plan to pay monthly
Extra payment to reduce interest and payoff time
Advanced Settings - Interest Calculation & Minimum Payment
Interest Calculation Results
Enter your balance and APR to see detailed interest calculations
Example Interest Calculation
Credit Card Interest Example
Scenario: $2,000 balance at 18% APR
Daily Rate: 18% ÷ 365 = 0.0493% per day
Billing Cycle: 30 days
Interest Calculations
Daily Interest: $2,000 × 0.000493 = $0.99 per day
Monthly Interest (simple): $0.99 × 30 = $29.58
Monthly Interest (compounded): $30.45
Yearly Interest (if no payments): $360
Interest Rate Insights
Daily Compounding
Most credit cards compound interest daily, making debt grow faster
Grace Period
Pay in full before due date to avoid interest charges
APR vs Interest Rate
APR includes fees; interest rate is just borrowing cost
Variable Rates
Many cards have variable APRs that change with market rates
Typical APR Ranges
How Credit Card Interest Works
Interest Calculation Method
Credit card interest is typically calculated using the average daily balance method. Your daily balance is multiplied by the daily periodic rate, then summed over the billing cycle.
Key Formulas
Daily Rate: APR ÷ 365
Daily Interest: Balance × Daily Rate
Monthly Interest: Balance × (Daily Rate × Days)
Compound Interest: Balance × ((1 + Daily Rate)^Days - 1)
Important Terms
- Average Daily Balance
- Sum of daily balances divided by days in billing cycle
- Grace Period
- Time between statement date and due date (usually 21+ days)
- Daily Periodic Rate
- Annual rate divided by 365 (or 360 for some banks)
- Billing Cycle
- Period between statements (typically 28-31 days)
Interest vs APR
Interest Rate
- • Basic cost of borrowing money
- • Applied to your daily balance
- • Used in interest calculations
- • May be fixed or variable
APR (Annual Percentage Rate)
- • Total yearly cost including fees
- • Includes annual fees, transaction fees
- • Required by law for disclosure
- • Used for comparing cards
Reducing Interest Charges
- ✓Pay in Full: Avoid interest entirely by paying statement balance
- ✓Pay Early: Reduce average daily balance with mid-cycle payments
- ✓Balance Transfer: Move to 0% APR promotional card
- ✓Negotiate Rate: Call issuer to request lower APR
- ✓Improve Credit: Better credit score = lower rates