Credit Card Interest Calculator Advertiser disclosure You're our first priority. Every time. We believe that everyone should be able to make financial decisions without hesitation. And while our site doesn't include every financial or company product available on the market We're pleased that the advice we provide and the information we offer and the tools we develop are impartial, independent simple, and cost-free. How do we earn money? Our partners compensate us. This may influence which products we review and write about (and the places they are featured on the site) However, it in no way affects our advice or suggestions which are based on many hours of research. Our partners do not pay us to guarantee favorable ratings of their goods or services. . Use the Credit Card Interest Calculator Calculate your credit card balance and interest rate to see how much your interest charges are for the month. Written by Paul Soucy Lead Assigning Editor Credit cards credit scoring, personal finance Paul Soucy has led the Credit Cards content team at NerdWallet since the year 2015. He served as an editor for USA Today, The Des Moines Register and the Meredith/Better Homes and Gardens family of magazines for over 20 years. He also established a profitable freelance writing and editing business that focuses on personal and business finance. He was editor of the USA Today Weekly International Edition for six years and received the highest honor of the year from ACES: The Society for Editing. He has a bachelor's degree in journalism and a Master of Business Administration. The family lives with his family in Des Moines, Iowa, with his fiancee, his two sons, and a dog named Sam. 25 January 2023 edited By Kenley Young Assigning Editor | Credit cards, credit scores Kenley Young directs daily credit coverage of credit cards for NerdWallet. Prior to that, he worked as a homepage editor and digital content producer at Fox Sports, and before that , a front page editor for Yahoo. He has years of experience in digital and print media, with periods as the chief of the copy desk as well as a wire editor, and an editor of the metro of The McClatchy newspapers chain. Email:
. A majority or all of the products we feature are made by our partners, who pay us. This influences which products we write about as well as the place and way the product is featured on a page. But, it doesn't affect our opinions. Our opinions are entirely our own. Here's a list of and . Credit card interest is a daily fact of the lives of tens of millions of cardholders However, for many, it's unclear the exact method by which credit card interest is calculated and what percentage of the interest rate charged on the card's account is translated into the amount of finance charged on their monthly statement. The calculator for credit card interest on NerdWallet can calculate the math for you. Start plugging in numbers or follow the instructions below for some tips on how you can achieve the most precise result. What factors go into the calculation of credit card interest How much interest you are due on a credit-card will be determined by a number of elements: Grace period Let's start with the grace period: In the event that you fully pay off your card before the due date each month, you will never need to pay interest on purchases. Period. You don't need an interest calculator for credit cards since there's no way to calculate. The rate of interest . If you transfer debt from one statement to the next, though there is a chance of interest accruing. >> LEARN MORE: Average daily balance When the credit card bill comes via mail (or is posted online) it will show the balance total at the last day of the billing period. However, that isn't the amount used to calculate the interest rate. The number that matters is your average daily balance in the period of your billing. The issuer of your card determines the balance of your account every day of that period and adds it together, and then divides by the number of days within the period. As an example, let's say you had a 30-day statement cycle that had the balance of $100. If you made no payments or charges for the full cycle, your daily balance would be $100. If you had a $45 charge posted in the morning of the 11th day and no other activity that day, your daily average total would amount to $130. (Ten days of $100, and the 20th day at $145.) If you were to have an $45 charge on the 11th day the cycle, and 60 dollars on the 21st day, the average daily amount would have been $110. (That's the 10 days you pay $100 for, followed by 10 days at $145, then the 10th day at $85.) Of course, keeping track of each day's balance can be easy if you make only one purchase and one payment every month. But if you use your credit card regularly throughout the month, it's much more challenging -- and figuring your daily average balance for the entire month is difficult. We've designed an instrument that lets you to enter your purchase and payment information throughout the month to calculate the average daily balance. Click here to OPEN the average daily balance TOOL The credit card interest calculator requires users to input their account balance. Averaging your daily balance will produce the most precise result. To get a rough estimate, you could use the balance at the end of your statement, or calculate what your balance is in the typical day. >> LEARN MORE About interest rate The interest rate applicable to purchases on your account will be printed on your monthly statement. The interest rates are listed in terms of annual percentage rates, or APR. Although the rate listed is an annual rate, credit cards usually charge interest on an ongoing basis. The daily rate is usually 1/365th the rate of annual. So if your APR is at, for instance, 18.99%, the daily rate will be around 0.052% that equals 1/365th 18.99 percent. Interest on credit cards typically compounds daily. That means the interest you pay on day 1 of the period is added into the calculation for day 2, the interest charged on day 2 is added into that calculation on day three and then on. Your each month usually includes all the interest that has accrued, any charges that you've paid and a small percentage of your principal balance. Nerdy Tip Many credit cards charge different APRs on different balances. The purchase APR is applicable to things you buy with the card, whereas separate APRs apply to balance transfer and cash advances. When this is the case the issuer of the card calculates different daily averages of balances for purchases as well as advances and transfers using the specific APRs for each. >> LEARN MORE: Day's in the cycle cycle of credit card billing covers about one month's worth of time, however the billing cycles don't align exactly with calendar months. They usually begin in one month and end at the end of the next. The billing cycle is closed on or around the same day of each month. The length of the billing period is different, usually between 28 and 31 days. There are a few reasons for this There are different months with different numbers of days. Some issuers might not allow statements to be closed on holidays or weekends. Federal regulations require for your due date to be on the same day every month, and that you have at least 21 days between when your statement is closed and the date you have to pay. The credit card interest calculator lets you select a range of days ranging from 28 to 31. If you're not sure, 30 days is an acceptable default. Or you could use to choose the days of the month of calendar when the cycle started. (For example, if a cycle began in April but ended in May, use 30 since April has thirty days.) What's next? Appendix: How math is used in our examples How math works 30-day cycle with a start balance of $100 No purchases or payments (30 days of $100) 30 100 x $3,000 divided by 30 days of the cycle $3000 x 30 = $100 $45 on day 11 (10 days at $100 ) and $20 days later at $145) (10 100 x $100) + (20 x $145) = $1,900 + $2,900 = $3,900 Divided by 30 days of cycle: $3,900 / 30 = $130 $45 payment on day 11. Then, $60 payment on day 21 (10 days for $100 then 10 days at $145, then $10 days of $85) (10 x 100) + (10 $145) + (10 x $85) = $1,000 + $1,450 + $850 = $3,300 Divided by 30 days of cycle 3300 x 30 = $110 About Paul Soucy: Paul Soucy is the principal credit card editor of NerdWallet. He has worked at USA Today and the Des Moines Register and has an MBA. In a similar vein... Choose the perfect credit card for you. Whether you want to lower your interest rate or earn more reward points, the right card is out there. Answer a few simple inquiries and we'll be able to narrow the selection for the best card for. Explore even more in credit Cards Discover more intelligent money moves - straight to your inbox. Sign up and we'll send you Nerdy posts on the financial topics which matter to you the most and other strategies to get the most from your money. Take all the appropriate financial decisions

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