Credit Card Interest Calculator

Daily periodic rate = APR ÷ 365. Daily interest = balance × DPR, summed over every day of the cycle (the average-daily-balance method). Paid in full by the due date, purchases are interest-free.

It is charged daily, not monthly

The single most important thing to understand about credit-card interest is that it is not your balance times your rate at the end of the month. It is charged every single day, on a daily periodic rate of APR ÷ 365, applied to your balance that day. The card adds up the interest from all the days in the cycle to get your charge. Because the daily figures are themselves rolled into the next month’s balance, the effective annual cost works out a little higher than the headline APR — daily accrual quietly compounds against you.

This calculator models that mechanism rather than a shortcut. It walks day by day through the cycle, so you can see the daily interest amount, watch the cumulative charge build, and understand exactly what you are being billed for.

Worked example — a $5,000 balance at 24% APR over a 30-day cycle: The daily periodic rate is 24% ÷ 365 = 0.0658% a day, so the card charges about $3.29 every day. Over 30 days that is roughly $99 in interest — on a balance that never changed.

The grace period — and how you lose it

Here is the part that saves people the most money: if you pay your statement balance in full by the due date, your purchases are interest-free. That is the grace period, and it means a credit card can cost you nothing in interest no matter how much you spend — provided you clear it every month. The calculator shows this directly: “if paid in full” is zero for purchases (a cash advance still accrues from day one), and “if carrying a balance” is the full charge.

But the grace period is fragile. The moment you carry a balance — pay anything less than the full amount — you lose it, and interest is charged on the average daily balance right back to the start of the cycle, not just on the unpaid bit. That is why carrying “just a little” costs more than people expect, and why paying in full is worth so much more than paying the minimum.

Average daily balance, and the cash-advance trap

When you do carry a balance, the interest is charged on the average daily balance — your balance averaged across every day of the cycle, not the closing figure. So a purchase made mid-cycle only counts for the days it was actually there, and a mid-cycle payment lowers the average from the day it lands. Enter a purchase or payment and the calculator shows the computed average daily balance the interest is really based on.

Cash advances are the trap to know about. Unlike purchases, they get no grace period at all — interest starts the day you withdraw the cash, usually at a higher rate, and often with an upfront fee. So even if you pay your card in full, a cash advance still costs you. The calculator breaks the cash-advance interest out separately so the gotcha is visible.