Credit Card Interest Calculator - Calculate Interest Charges
Free credit card interest calculator to determine daily, monthly, and annual interest charges on credit card balances. Understand the cost of borrowing
Credit Card Interest Calculator
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What is a Credit Card Interest Calculator?
A credit card interest calculator is a free financial tool that helps you calculate exactly how much interest you'll pay on your credit card balance over any time period. It shows daily, monthly, and annual interest costs.
This calculator helps with:
- Interest planning - Calculate interest costs for any time period
- APR comparison - Compare interest costs between different cards
- Budget impact - Understand how interest affects your monthly budget
- Grace period analysis - See interest costs if you miss payment due dates
- Minimum payment impact - Calculate interest on minimum payments
Credit Card Interest Components
Credit card interest calculation includes these key components:
Daily Rate
APR ÷ 365. Used to calculate daily interest charges on your balance.
Average Daily Balance
Sum of daily balances ÷ number of days. Most cards use this method.
Compound Interest
Interest charged on previously accrued interest, usually monthly.
Grace Period
Interest-free period (21-25 days) if you pay full balance by due date.
Types of Credit Card Interest Rates
Purchase APR
Standard rate for regular purchases, typically 15-25%. Most common rate type.
Cash Advance APR
Higher rate for cash advances, often 25-30%. No grace period applies.
Balance Transfer APR
Often 0% introductory rate for 12-21 months, then converts to purchase APR.
How to Use This Credit Card Interest Calculator
Enter Card Balance
Input your current credit card balance (e.g., $5,000)
Enter Interest Rate
Input your annual percentage rate (APR) (e.g., 18.99%)
Enter Time Period
Input number of days to calculate interest (e.g., 30 days)
View Interest Breakdown
See daily, monthly, and total interest charges
Benefits of Using This Calculator
- •Interest Cost Awareness: Understand exactly how much interest accrues daily and monthly.
- •Payment Timing Impact: See how grace period affects interest charges.
- •Card Comparison: Compare interest costs between different credit cards and rates.
- •Budget Planning: Factor accurate interest costs into your monthly budget.
- •Minimum Payment Analysis: Calculate interest impact of minimum vs. full payments.
Factors That Affect Credit Card Interest
1. Interest Rate (APR)
Higher APR significantly increases daily and monthly interest charges. Even 1% difference matters.
2. Balance Amount
Interest is calculated on your balance. Higher balances = higher daily interest charges.
3. Time Period
Longer time periods compound interest charges. Grace period can eliminate interest if paid in full.
4. Payment Timing
Paying before due date avoids interest. Late payments may trigger penalty APR rates.
Frequently Asked Questions
Common questions about credit card interest calculations
How is credit card interest calculated daily?
Credit card interest is calculated using the daily balance method. Daily interest = (Balance × APR ÷ 365) × number of days. This amount is added to your balance at the end of each billing cycle.
What's the difference between APR and daily rate?
APR is your annual interest rate. Daily rate is APR ÷ 365. For example, 18.99% APR = 0.052% daily rate. This small daily rate compounds to significant annual cost.
When does the grace period apply?
Grace period (usually 21-25 days) applies only if you pay your full balance by the due date. If you carry a balance, interest accrues from the purchase date, not just the due date.
How does minimum payment affect interest?
Making only minimum payments maximizes interest charges because most of your payment covers interest, not principal. This extends your debt and increases total interest significantly.
What is compound interest on credit cards?
Credit cards compound interest monthly. Each month, interest is calculated on your balance including previously accrued interest. This means you pay interest on interest.
How can I avoid credit card interest?
Pay your full balance by the due date each month to avoid interest charges. Some cards offer 0% introductory APR periods. Always check your statement's grace period terms.
Why is my interest higher than expected?
Several factors increase interest: carrying balance past grace period, cash advances (higher APR), penalty APR from late payments, and fees added to your balance that also accrue interest.
How does balance affect interest calculation?
Interest is calculated on your average daily balance, not end-of-month balance. Every charge and payment affects your daily balance and therefore your interest calculation.