2.0825
%
0.0685
%
$104.13
$3,708.13
$2,400.00
$1,291.87
$1,108.13
36
months
$475.20
2.0825
%
0.0685
%
$104.13
$3,708.13
$2,400.00
$1,291.87
$1,108.13
36
months
$475.20
The Credit Card Interest Calculator shows exactly how much interest your credit card balance generates daily, monthly, and annually. Understanding how interest accrues helps you make informed decisions about payments, timing, and whether to carry a balance.
Credit card interest works differently from most other loans. Instead of monthly compounding, credit cards use daily compounding based on your Average Daily Balance (ADB). The issuer calculates your balance each day, multiplies it by the Daily Periodic Rate (APR ÷ 365), and adds the interest to your running total. At the end of the billing cycle, this accumulated interest is charged to your account.
The Average Daily Balance method means that the timing of your purchases and payments within the billing cycle matters. A $5,000 purchase on day 1 of a 30-day cycle generates 30 days of interest, while the same purchase on day 25 generates only 5 days. Similarly, making a payment early in the cycle reduces your ADB and thus your interest charge.
At 20% APR, a $5,000 balance costs approximately $2.74 per day, $82.19 per month, or $1,000 per year in interest. These daily amounts may seem small, but they compound relentlessly. Over 5 years of carrying this balance, you would pay approximately $5,000 in interest — effectively doubling the cost of whatever you purchased.
This calculator provides the transparency that credit card statements often obscure. By seeing the daily cost of your balance in real dollars, you can make more motivated decisions about paying down debt versus making new purchases.
Daily Periodic Rate (DPR) = APR ÷ 365. Daily Interest = Balance × DPR.
Monthly Interest = Balance × DPR × Days in Billing Cycle. Annual Interest = Balance × APR (simplified, assuming constant balance).
Note: This uses simple interest per cycle. Actual credit card interest compounds monthly (interest on interest), which slightly increases the effective annual cost.
The daily interest number makes the cost tangible: if carrying $5,000 costs $2.74/day, every day you carry the balance is like handing the bank a couple dollars. Even reducing the balance by $1,000 saves $0.55/day — small amounts that compound to significant savings over months and years.
Inputs
Results
$5,000 at 20% APR costs $2.74/day, $82.19/month, or $1,000/year in interest.
Inputs
Results
$15,000 at 24.99% costs $10.27/day — over $300/month in interest alone.
Interest is calculated daily: Daily Interest = Average Daily Balance × (APR ÷ 365). This accumulates over the billing cycle (typically 28-31 days) and is added to your statement balance.
The ADB is the sum of your balance each day in the billing cycle divided by the number of days. Purchases increase it; payments decrease it. It determines your interest charge.
The DPR is your APR divided by 365 (or 360 for some issuers). At 20% APR, the DPR is 0.0548% — the percentage of your balance charged as interest each day.
Because of compounding. A 20% APR results in slightly more than 20% actual annual interest (approximately 21.9% APY) due to monthly compounding of interest charges.
Pay early in the billing cycle (reduces ADB), pay more than the minimum, negotiate a lower APR, transfer to a lower-rate card, or pay the full balance to avoid interest entirely.
Yes. Making payments throughout the month lowers your Average Daily Balance, reducing interest. For example, paying $200 twice monthly instead of $400 once can save 10-15% on interest.
If you pay your full statement balance by the due date, most cards offer a grace period (21-25 days) during which new purchases accrue no interest. Carrying any balance eliminates the grace period.
Cash advances typically have a higher APR (25-29%) and no grace period — interest starts accruing immediately. They may also have a separate, higher daily rate.
APY (Annual Percentage Yield) accounts for compounding and is the true annual cost. However, credit cards advertise APR. To convert: APY = (1 + APR/12)^12 − 1. At 20% APR, APY ≈ 21.94%.
Most major issuers use 365 (or 366 in leap years), which is the federal Truth in Lending standard. Some issuers use 360 days, which results in a slightly higher daily rate and more interest collected.
Roboculator Team
The Roboculator Team explains calculations, planning tools, and practical formulas in clear language for real-life situations.
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