Credit Card Interest Calculator

Most cards use a daily periodic rate: your APR is divided by 365 to get a daily rate, which is applied to your balance each day, and the accumulated interest is added at the end of the billing cycle. This calculator simplifies that to a monthly rate, dividing the APR by 12 and applying it to the balance each month, which closely approximates the cost. Because interest is charged on the running balance, carrying a balance means you pay interest on interest. Paying the full statement balance by the due date generally avoids interest on purchases entirely thanks to the grace period. For a full breakdown, read how credit card interest is calculated.

Minimum payments are set very low, often just a small percentage of the balance plus interest, so most of each payment barely covers the interest charged that month. With little going toward principal, the balance falls slowly and continues generating large interest charges, stretching payoff over many years and multiplying the total you repay. On a high-APR balance, minimum-only payments can take a decade or more and cost more in interest than the original purchases. This calculator shows how paying a fixed higher amount, or adding extra, dramatically shortens the timeline and cuts total interest.

No. It assumes you make every payment on time and models only interest based on the APR you enter. It does not include late-payment fees, over-limit fees, annual fees, cash-advance fees, or penalty APRs that some issuers apply after a missed payment. In reality, a single late payment can trigger fees and a much higher penalty interest rate, making the debt more expensive than shown here. Always pay at least the minimum by the due date to avoid these charges. Treat the projected interest and payoff time as a best case assuming disciplined, on-time payments.

Yes, substantially. Any amount you pay above the minimum goes directly to principal, lowering the balance that accrues interest and speeding up payoff. Because credit-card APRs are high, the interest saved by paying extra is effectively a large guaranteed return. Even a modest additional monthly amount can turn a multi-year payoff into a much shorter one and save hundreds of dollars. This calculator includes an extra-payment field and also shows the fixed payments needed to clear the balance in 12, 24, or 36 months, so you can pick a target and see the total cost of each.

In most cases, yes. New charges added while you are trying to pay down the balance work against you, because your payments must first cover the fresh spending before they can reduce the old debt. This can dramatically slow or even stall your progress. Pausing new purchases, and using cash or a debit card temporarily, lets every payment actually shrink the balance. This calculator has a field for new monthly charges so you can see how continued spending affects payoff time. Once the balance is cleared, using the card and paying it in full each month avoids interest.

APR stands for annual percentage rate and represents the yearly cost of borrowing on the card. For credit cards, the APR is essentially the interest rate, since cards typically do not have separate fees rolled into APR the way some loans do. What matters for daily cost is that the APR is broken into a daily or monthly rate and applied to your balance. Many cards carry variable APRs tied to a benchmark rate, so they can change over time. This calculator assumes the fixed APR you enter and does not model promotional or penalty rates.