Credit Card Interest Calculator Advertiser disclosure You're our first priority. Each every time. We believe that everyone should be able to make financial decisions without hesitation. And while our site doesn't contain every company or financial product on the market, we're proud of the guidance we offer, the information we provide as well as the tools we design are objective, independent, straightforward -- and free. So how do we make money? Our partners compensate us. This could influence the types of products we review and write about (and the way they appear on our site), but it does not affect our suggestions or recommendations, which are grounded in hundreds of hours of study. Our partners are not able to be paid to ensure positive ratings of their goods or services. . Use the Credit Card Interest Calculator Calculate the credit balance and interest rate to determine the amount of interest you would be for a 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 2015. He worked as an editor at USA Today, The Des Moines Register and the Meredith/Better Homes and Gardens family of magazines for more than 20 years. He also established a profitable freelance editing and writing practice that focuses on personal and business finance. He was editor of the USA Today Weekly International Edition for six years and won the top award from ACES: The Society for Editing. He has a bachelor's degree in journalism and a Master of Business Administration. The family lives in Des Moines, Iowa, with his wife, two sons, and a pet named Sam. Jan 25, 2023 Edited by Kenley Young Assigning Editor | Credit score, credit cards Kenley Young directs daily credit cards coverage for NerdWallet. Prior to that, he worked as a web editor and digital content producer for Fox Sports, and before that a front page editor for Yahoo. He has decades of experience in digital and print media, with stints as the chief of the copy desk as well as a wire editor, and an editor in the metro area of The McClatchy newspapers chain. Email:
. A majority or all of the products we feature are made by our partners, who pay us. This impacts the types of products we write about and the location and manner in which the product is featured on the page. However, this does not affect our opinions. Our views are entirely ours. Here is a list of and . Interest on credit cards is a daily fact of the lives of tens of millions of credit card users, but to many, it's an unknown 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 statements. The credit card interest calculator from NerdWallet can calculate the math for you. Begin by entering numbers or follow the instructions below for some tips on how you can get the most accurate result. What is the basis of the credit card interest calculation How much interest you get charged on a credit card will be determined by a variety of factors such as the grace period. Let's begin with the grace period. If you pay your credit card bill in full by the due date each month, you will never need to pay interest on purchases. Period. There's no need for an interest calculator for your credit card since there's no way to calculate. Your interest rate . If you carry debt from one statement to the next there is a chance of interest accruing. Find out more The average daily balance is displayed when the credit card bill comes through the post (or is made available online) it will show the total amount as it stood on the day that ended each billing time. However, that isn't the number that is used in calculating your interest charge. The key number is your average daily balance in the period of your billing. The credit card company determines the balance of your account every day of this period. They add them in a single sum, and then divides it by the days of the period. For instance, suppose you had a 30-day statement cycle, and you began with the balance of $100. If you did not make any charges or payments during the whole cycle, the average daily balance is $100. For instance, if you posted a charge of $45 post in the morning of the 11th day with no other activity the average daily balance would be $130. (Ten weeks at 100, and twenty days of $145.) If you had a $45 charge at the end of day 11 the cycle and a $60 payment on the 21st dayof the cycle, your daily average amount would have been $110. (That's 10 days at $100, the same amount of time at $145 and then 10 days at $85.) Of course, keeping track of each day's balance can be easy when you only make one purchase and one installment per month. However, if you make frequent use of your credit card regularly during the course of the month, tracking your balance is harder -- and figuring your average daily balance for the entire cycle is an absolute nightmare. We've developed an instrument that lets users to input their transactions and purchases during the course of a month to calculate your average daily balance: Click HERE TO OPEN OUR AVERAGE DAILY BALANCE TOOL The credit card interest calculator will ask you to input your account balance. Averaging your daily balance will produce the most accurate result. If you want to get a ballpark figure you can use the balance at the end of your statement, or calculate where your account balance stands during an average day. Learn more About interest rate The interest rate applied to the purchases you make on your account will be printed in your statement for the month. Interest rates are given as an annual percentage rate (also known as an APR. While the rate stated is an annual rate, credit cards usually charge interest on a daily basis. The daily rate is typically 1/365th of your annual cost. So if your APR is, say, 18.99%, the daily rate will be around 0.052 percent, which equals 1/365th 18.99%. The interest on credit cards generally compounds daily. That means the interest you pay on day 1 of the month is added to calculate the day 2, and the interest accrued on day 2 is added to that calculation on day three, and so on. Your each month usually includes all the interest that has been accrued, as well as any fees you have incurred as well as a small portion of the principal balance. Nerdy Tip Many credit cards charge different rates for different balances. The purchase APR is applicable to things you buy with the card, while different APRs apply to balance transfer and cash advances. In the event of this the issuer of the card determines the average daily balances for transactions, transfers and advances and applies the APR specified for each. Learn more: Day's in the cycle Every cycle of credit card billing covers about one month's worth of time, but the dates of billing don't coincide exactly with calendar months. They usually begin in one month , and then end within the following month. Your billing cycle closes on or about the same day each month. The length of the billing period varies between 28 and 31 days. There are a few reasons to this There are different months with different number of days. Some issuers might not allow statements to be closed on holidays, weekends or on weekends. Federal regulations require for your due date to fall on the same date of every month, and that you have at least 21 days between when the statement expires and your due date. Our credit card interest calculator lets you choose a number of days from 28 to 31. If you aren't sure that you're in the right place, 30 days are the best option; or you can choose to choose the days of the month of calendar when the cycle started. (For example, if a cycle began in April and concluded in May choose 30 because April is a month with 30 days.) What's next? Appendix: How math is used in our examples What math is involved: 30-day cycle, starting balance of $100 No transactions or purchases (30 days at $100) 30 cents = $3,000 Divided by 30 days in cycle $3000 x 30, which is $100, $45 purchase on day 11 (10 Days at $100 ) and twenty days of $145) (10 100 x $100) + (20 x $145) = $1000 + $2,900 = $3,900 Divided by 30 days in cycle: $3,900 / 30 = $130 $45 payment on day 11. Then, the payment of $60 on day 21 (10 days for $100 followed by 10 days with $145 and then $10 days of $85) (10 x $100) + (10 x $145) + (10 x $85) = $1,450 + $1,000 + $850 = $3300. Divided by 30 days in a cycle: $3,300 / 30 = $110 About The author's name: Paul Soucy is the lead credit cards editor of NerdWallet. He has worked for USA Today and the Des Moines Register and has an MBA. On a similar note... Choose the right credit card that is suitable for you. Whether you want to pay less interest or earn rewards, the right card's available. Simply answer a few questions and we'll narrow the selection for you. Explore even more in credit Cards Find out more money-savvy moves delivered directly to your inbox Sign up and we'll send you Nerdy articles about the money topics which matter to you the most and other strategies to get the most out of your money. Take all the appropriate money moves

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