Credit Card Interest Calculator
Calculate the interest charged on your credit card balance for a billing cycle using the daily periodic rate method
Last updated: 2026-08-03
Credit card issuers don't charge interest once a year or once a month in one lump sum -- they charge it every single day, using what's called a daily periodic rate (DPR). This calculator shows exactly how much interest accrues on a carried balance for one billing cycle, using the same average daily balance method described by the Consumer Financial Protection Bureau (CFPB) and used by virtually every major card issuer. It also projects what happens if that balance goes unpaid for several billing cycles in a row, since unpaid interest gets added to the balance and starts accruing interest itself the next cycle.
How Credit Card Interest Is Calculated
O(1) per cycle, O(n) for an n-cycle projectionDPR = daily periodic rate · APR = annual percentage rate (as a decimal)
ADB = average daily balance for the billing cycle
Example: A $5,000 balance at 24% APR over a 30-day billing cycle: DPR = 0.24 / 365 = 0.0006575 (0.0658% per day) Interest = $5,000 × 0.0006575 × 30 = $98.63
That $98.63 gets added to the balance if it isn't paid off, and next cycle's interest is charged on the new, higher balance ($5,098.63) -- which is why carrying a balance compounds against you even though your card doesn't advertise a "compounding frequency" the way a savings account does.
Average daily balance: Issuers calculate the ADB by adding up the balance owed on each day of the billing cycle and dividing by the number of days -- so a payment made mid-cycle lowers the ADB (and the interest charged) for that cycle. This calculator assumes a constant balance across the cycle (no new purchases or payments), which is the same simplifying assumption most online credit card calculators use, and is exact whenever the balance genuinely doesn't change mid-cycle.
Use Cases
Estimating Next Month's Interest Charge
See roughly how much interest will show up on your next statement before it arrives, based on your current balance, APR, and billing cycle length.
Comparing Cards by APR
Two cards with different APRs on the same balance can produce very different interest charges -- compare the daily periodic rate and per-cycle interest side by side before transferring a balance.
Understanding the Cost of Carrying a Balance
The multi-cycle projection shows how quickly unpaid interest compounds if a balance is left untouched for several months -- a concrete illustration of why paying more than the minimum matters.
Budgeting for Debt Payoff
Knowing the interest charged per cycle helps separate how much of a payment actually reduces the balance versus how much just covers the interest that accrued since the last statement.
Frequently Asked Questions
What is a daily periodic rate (DPR)?
The daily periodic rate is your card's APR divided by 365. Card issuers use it to charge interest daily rather than monthly or annually -- multiplying the DPR by your balance each day (in effect) is what "APR" actually translates to on a statement.
What is the average daily balance (ADB) method?
Most U.S. card issuers calculate interest using the average daily balance for the billing cycle: they add up the balance owed on every day of the cycle and divide by the number of days. A payment made partway through the cycle lowers the ADB (and the interest charged) for the days after the payment posts. This calculator treats the balance as constant for the cycle, which matches the ADB exactly when no purchases or payments occur mid-cycle.
Why does my card charge more interest some months than others?
Interest scales with the number of days in the billing cycle (28-31 days depending on the month) and with how much of the cycle a given balance was outstanding. A longer cycle or a higher average balance both increase the interest charged, even at the same APR.
Does unpaid interest compound?
Yes. If interest isn't paid off, it's added to the balance, and the next billing cycle's interest is calculated on that new, larger balance -- effectively compounding cycle over cycle. The projection table on this page shows that effect over multiple billing cycles.
How can I reduce the interest I'm charged?
Paying down the balance before or during the billing cycle lowers the average daily balance the interest is calculated on. Paying the statement balance in full by the due date avoids interest entirely on most cards (during the grace period), since interest generally only accrues on a balance carried past the due date.
Is 365 or 360 days used to calculate the daily rate?
Most U.S. credit card issuers divide the APR by 365, though a small number of financial products use a 360-day convention. This calculator uses 365 days, matching the method described by the CFPB and the majority of consumer credit card agreements.