Credit Card Interest Calculator
Balance & APR
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- United States card and lending practice
- Scope and limitations
- Educational estimate only. Your issuer sets the minimum-payment formula, how a payment is allocated across balances, when interest is charged, and any fees or promotional terms — check your cardholder agreement for the figures that bind.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the balance you are carrying on the card.
- 02
Enter the APR from your statement — use the purchase APR unless the balance came from a cash advance or an expired promotional rate, which are usually higher.
- 03
Read the monthly, daily and yearly interest: three views of the same charge, in whichever unit you plan around.
- 04
Open Advanced options and set the days in your billing cycle if you want the exact figure — a 31-day cycle is billed more than a 28-day one, and the statement tells you which you had.
- 05
Check the carry table to see what the balance costs if you hold it for three, six or twelve months.
- 06
To turn the cost into a plan, take the same balance and APR to the Credit Card Payoff Calculator and try a monthly payment.
Formula
Yearly interest = balance x APR. Monthly interest = yearly interest / 12 — the even twelfth, useful for budgeting. Your issuer does not bill that way. It divides the APR by 365 to get a daily periodic rate, applies it to your average daily balance and multiplies by the number of days in the cycle, so a 31-day month genuinely costs more than a 28-day one. Set the cycle length under Advanced options and the tool reports that figure too. Interest added over a full year is above APR x balance, because unpaid interest joins the balance and is charged again: it is balance x ((1 + APR/12)^12 - 1). Paying the full statement balance by the due date keeps the grace period on purchases and costs nothing at all.
Example
Inputs: a $6,000 balance at 22% APR. Step 1 — Yearly interest. Multiply the balance by the APR: $6,000 x 22% = $1,320. That is the rate applied once. Step 2 — Monthly interest. Divide by 12: $1,320 / 12 = $110.00 a month. This is the even slice that treats every month as the same length. Step 3 — Daily interest. The daily periodic rate is the APR divided by 365: 22% / 365 = 0.0603% a day. Applied to the balance: $6,000 x 0.000603 = $3.62 a day. Step 4 — What the statement actually charges. Multiply the daily figure by the days in the cycle: $3.62 x 30 = $108.49 for a 30-day cycle, or $3.62 x 31 = $112.10 for a 31-day one. The even $110.00 sits between them. Step 5 — A year of carrying it. Unpaid interest joins the balance and is charged again, so twelve months add $6,000 x ((1 + 0.018333)^12 - 1) = about $1,462, not $1,320. A $6,000 balance left untouched becomes about $7,462.
Definitions
- APR (annual percentage rate)
- The yearly rate on a balance. For cards it equals the interest rate — unlike a mortgage APR, it does not fold in fees.
- Daily periodic rate
- APR ÷ 365. The rate your issuer applies to each day's balance before totalling the cycle.
- Average daily balance
- Your balance averaged over every day in the billing cycle. The basis most U.S. issuers actually charge interest on.
- Billing cycle
- The 28-to-31-day period a statement covers. Interest is calculated across it and charged at its close.
- Grace period
- The window in which new purchases accrue no interest, available only while you pay the statement balance in full each month.
- Compounding
- Unpaid interest joining the balance and accruing interest itself in the following cycle.
- Variable rate
- An APR set as an index — normally the prime rate — plus a margin, so it moves when the index moves.
- Prime rate
- The benchmark most U.S. card APRs are pegged to. It tracks the Federal Reserve's target rate.
- Cash advance APR
- The separate, higher rate on cash taken against the card. It accrues from day one, with no grace period and usually a fee.
- Penalty APR
- An elevated rate an issuer may impose after a payment is 60 days late, often close to 30%.
- Purchase APR
- The rate on ordinary purchases — the one to enter here unless your balance came from an advance or a promotional offer.
- Statement balance
- What you owed when the cycle closed. Paying this in full is what preserves the grace period.
Good to know
How a card turns an APR into a charge
A credit card quotes its price as an annual percentage rate, but the card never waits a full year to bill you. Instead it slices that yearly rate into a smaller periodic rate and applies it to your balance over a short window. This calculator shows the same idea in three views of one rate. The yearly figure is the balance multiplied by the APR, the headline cost of carrying that balance for twelve months. The monthly figure is that yearly amount divided by twelve, an even slice that treats every month as identical. The daily figure divides the yearly amount by 365, the smallest unit and the one most card issuers actually work in. All three describe the same APR; they differ only in the length of time each one covers. Seeing them side by side makes the cost concrete in whatever unit you think in, whether you plan around a monthly statement or a daily decision to delay a payment. The point of expressing the rate three ways is that interest feels abstract as a single annual percentage but immediate as a daily number. A rate that sounds modest per year can look very different once you see what it adds every single day the balance sits unpaid. Understanding this conversion is the foundation for everything else on a statement, because the finance charge, the grace period and the cost of carrying a balance all flow from how that one annual rate is broken into pieces and applied to the money you owe.
The daily periodic rate and why it divides by 365
Most issuers do not charge interest in monthly lumps. They convert the APR into a daily periodic rate by dividing it by 365, then apply that tiny rate to your balance once for every day in the billing cycle. Dividing by 365 rather than 12 lets the card match the charge to the exact number of days money is owed, which is fairer to both sides and accounts for cycles that run 28, 30 or 31 days. The daily periodic rate is small by design: a 22% APR becomes roughly 0.06027% per day. That looks negligible, but it is applied every day without rest, including weekends and holidays, so the small number quietly accumulates. To find the daily interest in this tool, the yearly amount is divided by 365, which is mathematically the same as multiplying the balance by the daily periodic rate. Both routes reach the same figure because the daily periodic rate is simply the APR expressed per day. Knowing the daily rate is useful beyond curiosity. It tells you what each extra day of delay costs, which helps when you are deciding whether to pay a few days early or whether a short wait for payday is worth it. It also explains why two cards with the same APR can produce slightly different charges if their cycles differ in length, since more days in the cycle means the daily rate is applied more times.
The average daily balance method
Real statements rarely apply interest to a single fixed balance, because your balance changes during the month as purchases, payments and credits post. The standard approach issuers use is the average daily balance method. The card records your balance at the end of every day in the cycle, adds those daily balances together, and divides by the number of days to get an average. It then multiplies that average by the daily periodic rate and by the number of days in the cycle to produce the finance charge. This method rewards paying early in the cycle, because a payment that posts on day three lowers the balance for far more days than the same payment on day twenty-eight, pulling the average down. It also means a single large purchase late in the cycle adds less interest that month than the same purchase made on day one. This calculator uses a single balance you enter, so it shows the clean case where the balance does not move. That is the right way to understand the rate itself, but on a live account the average daily balance is what the daily periodic rate is actually applied to. If you want to estimate a real charge, think of the balance you enter here as your average across the cycle rather than today's snapshot. Understanding the averaging is what separates a rough guess from a number that matches the statement, and it explains why timing payments within the month genuinely changes what you owe.
Building the monthly finance charge from daily interest
A statement's finance charge is not simply the yearly cost divided by twelve. It is built from the ground up, one day at a time. The card takes the daily periodic rate, applies it to each day's balance, and sums the result across every day in the cycle. In the simplest case where the balance never moves, this is the daily interest multiplied by the number of days in the billing cycle. With a steady 100,000 balance at 22%, the daily interest is about 60.27, so a 30-day cycle produces a finance charge near 1,808 and a 31-day cycle near 1,868. That is why two consecutive statements on an unchanged balance can show slightly different charges: the months are different lengths. This tool's monthly figure instead divides the yearly amount by twelve, giving an even 1,833.33 that ignores cycle length. Both numbers are correct for what they describe. The yearly-over-twelve view is a clean average that smooths the calendar, ideal for budgeting and comparing cards. The day-count view is what an issuer actually posts, sensitive to whether the cycle has 28, 30 or 31 days. Holding the two apart prevents confusion: use the even monthly figure to plan and to compare, and expect the real statement charge to wobble a little around it as the calendar shifts. The deeper lesson is that the monthly charge is an outcome of daily accrual, not a separate calculation, so anything that changes your daily balances changes the monthly total.
The grace period: how paying in full avoids interest
Credit cards offer something most loans do not: a grace period during which new purchases carry no interest at all. When you pay your statement balance in full by the due date, the issuer typically charges no interest on the purchases from that cycle. In effect the card lends you money for free for the weeks between the purchase and the due date. This is the single most valuable feature for anyone who uses a card carefully, and it is why a person who pays in full every month can run large amounts through a card and never pay a cent of interest. The grace period usually spans from the end of the billing cycle to the payment due date, often around three weeks, and applies specifically to purchases rather than to cash advances, which generally start accruing immediately. The mechanics are simple but the discipline matters: the benefit exists only if the entire statement balance is cleared, not merely the minimum or a partial amount. Paying anything less than the full statement balance is what ends the grace period and switches the card from a free short-term loan into an interest-bearing debt. Because of the grace period, the interest figures this calculator shows are the cost of not paying in full. For someone who clears the statement each month, the monthly and daily numbers represent interest avoided rather than interest paid, which is the clearest argument for paying the full balance whenever you can.
Losing the grace period once a balance is carried
The grace period is not permanent; it is a privilege you keep only by paying in full. The moment you carry a balance past the due date, most cards revoke the grace period, and the consequences reach further than many people expect. Once you owe a balance, interest applies not just to that leftover amount but typically to new purchases from the day they post, with no interest-free window. So a card that was free to use becomes one where every swipe starts accruing interest immediately. Recovering the grace period usually requires paying the full balance and then keeping it paid, often for a cycle or two, before the interest-free treatment on new purchases returns. This is why carrying a balance is more expensive than the headline interest on the old debt alone suggests: it quietly taxes everything you buy afterward until you reset. It also explains a common surprise, where someone pays off most of a balance, makes new purchases, and is still charged interest because the grace period had already lapsed. The practical takeaway is that the first unpaid statement is a turning point. Before it, the card is a convenience that can be free; after it, the card is a loan on which nearly everything you spend earns interest from day one. Knowing this changes the calculation: clearing a balance is worth more than the interest it saves on that balance, because it also restores the interest-free treatment of future spending.
Why unpaid interest compounds
Interest on a carried credit card balance does not sit still; it compounds. When a finance charge is added to your balance and goes unpaid, the next cycle's interest is calculated on the new, larger balance, so you begin paying interest on previous interest. Because the daily periodic rate is applied to the balance each day, and that balance now includes prior charges, the cost grows on itself rather than staying flat. This compounding is gentle from one cycle to the next but relentless over many. A balance left to accrue does not grow in a straight line; it curves upward, accelerating the longer it is neglected. The effect is amplified by the daily mechanics, since interest can be added and then itself earn interest within a short window. This is the mirror image of how savings grow through compounding, except here it works against you. It is also why minimum activity on a balance can feel like running to stand still: a payment that barely exceeds the new interest leaves the principal almost untouched while the compounding continues. The defense against compounding is time, not just amount. Reducing how long a balance lingers matters as much as reducing its size, because every additional cycle layers fresh interest on top of old. The interest figures shown here are a single snapshot at the current balance; left unpaid, the real cost rises above them as each cycle's charge folds into the next and the daily rate goes to work on a steadily larger sum.
Why the statement charge differs from a simple monthly figure
It is common to expect interest to be the annual cost divided by twelve, a tidy and predictable number. Statements rarely cooperate. The actual finance charge depends on the day count of the billing cycle and on how your balance moved through it, so it drifts away from the even monthly figure. Cycle length is the first reason: a 31-day cycle applies the daily periodic rate one more time than a 30-day cycle, and February's short cycle applies it fewer times still. On a steady 100,000 balance at 22%, that is the difference between roughly 1,808 over 30 days and 1,868 over 31, against the even 1,833.33 the yearly-over-twelve method gives. The second reason is movement within the cycle. Because the average daily balance method weights each day, payments and purchases shift the average, so two months with the same starting balance can post different charges. None of this means any figure is wrong. The even monthly number is a smoothed average that makes budgeting and card comparison straightforward, while the statement number is the precise result of daily accrual over a specific calendar window. Expecting them to match to the cent leads to confusion when the statement arrives a little higher or lower. The right mental model is a range: the even figure is the center, and the real charge orbits it depending on how many days the cycle held and how your balance flowed across them. Treat the calculator's monthly output as the planning anchor, not a promise of the exact statement line.
Reading the finance charge on your statement
A credit card statement spells out exactly how the interest was built, and learning to read it turns an opaque number into something you can check. Look first for the interest charge or finance charge line, which is the money added to your balance for the cycle. Near it the statement usually lists the APR, the corresponding daily periodic rate, and the balance the rate was applied to, which is typically the average daily balance rather than the closing balance. Many statements separate balances by type, showing purchases, cash advances and any promotional balances on their own rows, because each can carry a different rate and cash advances generally have no grace period. The number of days in the billing cycle appears too, which lets you reconcile the charge: multiply the balance subject to interest by the daily periodic rate and by the day count, and you should land close to the posted figure. Doing that arithmetic occasionally is a good habit, both to confirm the issuer's math and to internalize how the daily rate compounds into the monthly charge. If the charge looks larger than expected, the usual culprits are a lost grace period, a cash advance accruing from day one, or a higher average daily balance than the closing balance suggests. The calculator mirrors the simplest version of this line, applying one rate to one balance, so it serves as a baseline. Comparing its output to a real statement reveals how cycle length, balance movement and balance type push the actual charge above or below the clean estimate.
How issuers set and change the rate
The APR a card applies is not fixed by nature; it is set by the issuer and, on most cards, can change over time. Many cards carry a variable rate tied to a published benchmark plus a margin, so when the underlying index moves, the card's APR follows and every periodic rate derived from it shifts with it. A change in the APR flows straight through the same machinery shown here: a higher APR raises the daily periodic rate, which raises the daily interest, the finance charge and the yearly cost, all in proportion. Because the conversion is linear, a rise from 22% to 24% lifts each of those figures by the same ratio. Cards may also apply different APRs to different balance types, with one rate for purchases, another for cash advances, and sometimes a temporary promotional rate on certain balances. That is why a single card can show several rates on one statement, each driving its own slice of the finance charge. The practical implication is that the cost of carrying a balance can rise even if you do nothing, simply because the rate changed. It also means the headline APR is the lever that matters most: small differences in the annual rate become meaningful once multiplied by a large balance and a full year of daily accrual. This calculator takes the APR as a given input so you can test how sensitive the cost is to the rate, plugging in different values to see how the daily, monthly and yearly interest respond to a higher or lower number.
Frequently asked questions
How does my issuer turn an APR into a monthly charge?
Most divide the APR by 365 to get a daily periodic rate, apply it to your average daily balance, and bill the sum once a cycle. The monthly figure here is APR ÷ 12, the round number to plan with; 'Charged this cycle' is the daily-rate method, and Advanced options lets you set the cycle length your statement actually used.
Why is my actual interest charge slightly different?
Cycles are 28 to 31 days rather than exactly a twelfth of a year, your average daily balance moves with every purchase and payment, and some issuers compound daily. Expect a small difference, not a large one.
Do I pay interest if I clear the statement balance every month?
No. Paying the statement balance in full keeps the grace period, and new purchases accrue no interest. That is why the same card costs one person nothing and another person hundreds a year.
What is a daily periodic rate?
The APR divided by 365 — the rate actually applied to your balance each day. On a 22% card it is about 0.0603% a day, which on $6,000 is roughly $3.62 daily.
Is a cash advance charged at the same rate?
Almost never. Cash advances usually carry a higher APR, charge a fee of 3% to 5% up front, and — unlike purchases — accrue interest from the transaction date with no grace period at all.
How do I lower the interest without paying more?
Three routes: ask your issuer for a lower rate, which they grant more often than people expect; move the balance to a 0% promotional card; or consolidate into a fixed-rate loan. The Balance Transfer and Debt Consolidation calculators price the last two.
Does the interest compound?
Yes. Unpaid interest is added to the balance and accrues interest itself in the next cycle. It is why a balance left alone grows faster than a simple percentage suggests.
What is a variable APR?
Almost all U.S. card APRs are variable: an index — usually the prime rate — plus a fixed margin. When the Federal Reserve moves rates, your card rate follows within a statement cycle or two.
Why did my rate go up without warning?
A variable APR moves with its index without notice. A rate increase for any other reason requires 45 days' notice, and generally cannot apply to your existing balance unless you were more than 60 days late.
Does carrying a small balance help my credit score?
No — that is a persistent myth. Your issuer reports the statement balance whether or not you carry it into the next month, so paying in full reports the same activity and costs no interest.
How much does one month of carrying actually cost?
Balance × APR ÷ 12. On $6,000 at 22% that is $110 for a single month, which is what the tool leads with — a figure worth knowing before deciding to carry rather than clear.
Is the interest on a credit card tax deductible?
Not for personal use. Interest on consumer credit cards has not been deductible in the U.S. since the Tax Reform Act of 1986. Business card interest on genuine business expenses is a different matter.