How is credit card interest calculated?

Interest is calculated daily on your average daily balance. The daily rate is your annual rate ÷ 365. This compounds, meaning you pay interest on interest.

Why does paying the minimum take so long?

Minimum payments are designed to cover mostly interest with little going to principal. At 20% APR, a $5,000 balance with minimum payments takes over 20 years to clear.

Do I pay interest if I pay in full each month?

No! If you pay your statement balance in full by the due date, you won't pay any purchase interest. This is the interest-free period (usually 44-55 days).

Credit Card Interest Calculator

Calculator

Calculate how much interest you're paying on your credit card balance

Free to useNo data storedAI insightsUpdated: February 2026

Credit card interest compounds daily and adds up fast. This calculator shows you exactly how much you're paying in interest and how long it will take to become debt-free.

Enter Your Details

Real-World Examples

$5,000 Balance at 20%

$5,000 balance at 20% APR, paying $200/month with no new purchases.

Inputs:

balance:5,000rate:20payment:200

Time to payoff: 32 months. Total interest: $1,364. If you only paid minimum ($100): 9+ years and $5,840 interest!

Frequently Asked Questions

Glossary

Purchase Rate

The interest rate charged on purchases when you don't pay your balance in full.

Daily Interest

Credit card interest is calculated daily (rate ÷ 365) and compounds.

Minimum Payment

Usually 2-3% of balance or $25, whichever is higher. Designed to maximize interest paid.

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Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026