Credit Card Interest Calculator

A credit card charges interest by the day. The issuer takes your APR — the yearly rate on your statement — and divides it by 365 (a few cards use 360; the statement says which) to get a daily periodic rate: 24.99% becomes 0.0685% a day. That daily rate is multiplied by your average daily balance, what you owed each day of the billing cycle averaged out, and then by the number of days in the cycle. The result is the "interest charge" line on your statement, and the CFPB walks through the same arithmetic.

This page uses the balance you type as the average for the whole cycle — which is exactly right for a month with no new purchases and a payment at the end, a little high if you paid earlier in the cycle, and low if you kept buying. That one figure is the answer to the search that brought most people here: on $5,000 at 24.99%, a 30-day cycle adds about $102.70, and of a $150 payment, that is 68.5% — the other $47.30 is what actually reaches the balance.

The payoff part repeats that month after month: each month's interest comes out of the payment first, the rest lowers the balance, and a lower balance means a little less interest next month, so a little more of the same payment gets through. The months it takes and the interest along the way are counted from that loop, one month at a time. A payment at or below the month's interest never gets through at all — the balance grows — and the receipt says so in words rather than printing a number. Give it a deadline and it works backwards: the level payment that lands on zero in exactly that many months, and the interest that plan costs next to the one you are on.

A worked example

Take the defaults: a $5,000 balance at 24.99%, paying $150 a month, on a 30-day cycle. The daily periodic rate is 0.0685%, so one cycle adds about $102.70 of interest. Keep paying $150 and the card is clear in 58 months — 4 years 10 months — after about $3,622.30 of interest, which makes $8,622.30 paid in all for $5,000 of spending. Ask to be done within 24 months instead and the payment needed is $266.84 a month; that plan costs about $1,403.93 of interest, $2,218.37 less than the $150 plan, in exchange for $116.84 more every month for two years. Within 12 months it is $475.20 a month and about $702.36 of interest. Same card, same rate; the size of the payment is the whole difference.

Common questions

Why did my interest charge go up in a month I made a payment? Because the charge is based on the average balance across the whole cycle, not on what you owe the day you pay. A payment near the end of the cycle barely moves that average; new purchases raise it; and once you carry a balance from one statement to the next, most cards drop the grace period — the window in which new purchases charge nothing — so purchases start accruing interest the day they post. Two smaller reasons: a longer cycle costs more (the same $5,000 at 24.99% is about $102.70 over 30 days and about $106.12 over 31), and a variable APR goes up when the rate it is tied to does. The interest charge calculation box on the statement shows the APR and balance it actually used.

Does paying earlier in the cycle lower the interest? Yes, because the charge is the daily rate times the average daily balance. On $5,000 at 24.99% over a 30-day cycle, a $150 payment that lands on day 15 makes the average balance $4,925 instead of $5,000, and the cycle's interest about $101.16 instead of $102.70 — about $1.54 less. Small per cycle; the larger effect is that a dollar paid earlier stops accruing earlier, so the balance starts falling sooner.

What is the minimum payment actually doing? Mostly paying the interest. On $5,000 at 24.99%, the month's interest at APR ÷ 12 is about $104.13. A flat 2%-of-balance minimum would be $100 — less than the interest, so the balance would grow — which is why many issuers use the other formula, the month's interest plus 1% of the balance: about $154.13 here, which covers the interest and moves the balance by $50. The minimum payment calculator works out your card's figure and the minimum-only timeline, and how credit card minimum payments are calculated explains both formulas.

This is an estimate. The cycle figure treats your balance as the average daily balance and uses APR ÷ 365; the payoff figures compound monthly at APR ÷ 12, which on a 30-day cycle comes to $104.13 rather than $102.70 on the defaults — the small gap between "this cycle" and "a month". Both assume a fixed APR, no new purchases, and no fees. Cash advances and balance transfers usually carry their own APRs and are charged separately.