Credit Card Interest Calculator
Daily and monthly interest accrual on any balance and APR.
Interest accruing right now
$3.15 / day
Most cards calculate interest daily on Average Daily Balance and capitalize monthly. Carry-balance = pay interest from purchase date (no grace period).
👉 Want to compare rates? See what each APR costs — monthly interest on a $5,000 balance at 0% to 30% APR.
Most US credit cards charge interest daily, not once a month. Your APR is divided into a small daily rate, applied to your balance every day, and the accrued interest is summed up and posted at the end of the billing cycle.
This calculator takes your balance and APR and shows both the daily interest and the monthly total, so you can see what carrying a balance really costs and how much of a payment goes to interest versus principal.
One key point: if you pay your statement balance in full by the due date, purchase interest is usually $0 thanks to the grace period. Interest only becomes a real cost once you carry a balance from month to month.
How this calculator works
The daily periodic rate is your APR divided by 365. A 22% APR becomes 0.22 / 365 = 0.060274% per day. Each day, that rate is applied to your balance (most issuers use the average daily balance for the cycle), and the daily interest charges are added together over the billing period. On a $5,000 balance at 22%, one day of interest is 5000 x 0.00060274 = $3.01, and roughly a 30-day cycle accrues about $90. Because yesterday's interest can join the balance that tomorrow's rate is applied to, interest compounds. A simple monthly estimate uses the monthly periodic rate instead: APR / 12, so 0.22 / 12 = 1.833% x $5,000 = about $91.67. The two methods land close together; the daily method is what your issuer actually uses.
What affects the number
- Daily periodic rate = APR / 365, applied to your balance every single day of the cycle.
- Average daily balance: most issuers total your balance for each day of the cycle and divide by the number of days, so mid-cycle payments reduce interest.
- Grace period: pay the full statement balance by the due date and new purchases typically accrue no interest; carry any balance and the grace period is often lost until you pay in full again.
- Compounding: unpaid interest is added to the balance, so you can pay interest on prior interest.
- APR type: variable APRs are tied to the prime rate and move when the Fed changes rates, so your daily rate can shift between cycles.
- Balance mix: purchases, cash advances, and transfers can each carry different APRs, and payments are generally applied to the highest-APR balance first (above the minimum).
Frequently asked questions
How is credit card interest calculated daily?
Your issuer divides your APR by 365 to get a daily periodic rate, then applies it to each day's balance. Those daily charges are added up over the billing cycle and posted as one interest amount on your statement. Because unpaid interest is added back to the balance, it compounds over time.
How can I avoid paying credit card interest?
Pay your full statement balance by the due date every month. Doing so keeps your grace period intact, so new purchases accrue no interest. Note that cash advances and many balance transfers have no grace period, so those start accruing interest immediately regardless of how you pay.
Why is my interest charge higher than APR divided by 12?
Two reasons. First, issuers use daily compounding (APR / 365 applied each day), which produces slightly more than a flat monthly rate. Second, the charge is based on your average daily balance, so a higher balance earlier in the cycle raises the total even if you pay some off later.
Does making a payment mid-cycle reduce my interest?
Yes. Because interest is based on your average daily balance, paying earlier in the cycle lowers the balance that the daily rate is applied to for the remaining days. Paying sooner and more often reduces the interest you accrue, even if the due date is weeks away.
This calculator provides general estimates for educational purposes only and is not financial advice. Your actual costs and credit outcomes depend on your specific card terms, issuer, and situation.