Credit Card Interest Calculator
How much interest will you pay on your credit card? Enter your balance, APR, and how fast you want to clear it. You'll see the total interest, the monthly payment it takes, and exactly what paying only the minimum would cost instead.
Paying $261.84 a month clears $5,000 at 22.99% APR in 2 years — $6,284.20 paid in total.
- Time to payoff
- 2 years
- Total interest
- $1,284
- Time to payoff
- 50+ years
- Total interest
- $45,140+
- First payment
- $100.00
- Still owed at year 50
- $3,017
How Credit Card Interest Is Calculated (Daily Balance Method)
Your card's APR is an annual rate, but interest is charged far more often than once a year. Almost every US issuer uses the average daily balance method: they take your APR, divide it by 365 to get a daily periodic rate, and apply that rate to your balance every single day of the billing cycle.
Work an example. A 22.99% APR divided by 365 is a daily rate of about 0.0630%. On a $5,000 balance, that's roughly $3.15 of interest added the first day. The next day's interest is charged on the slightly higher balance, and so on — interest compounding on interest. Over a 30-day cycle those daily charges sum to about $95, which is what lands on your statement.
Two consequences fall out of this. First, because the rate compounds daily, your effective annual cost is a little higher than the printed APR — a 22.99% APR works out to roughly 25.8% effective. Second, every dollar of principal you knock down early stops accruing interest for the rest of the cycle, which is why paying more, sooner, saves more than it looks like it should.
The grace period is the one escape hatch. Pay your statement balance in full by the due date and most cards charge zero interest on purchases. Interest only starts once you carry a balance past the due date — covered in depth in how credit card interest works.
Minimum Payment vs Fixed Payment Interest Comparison
The single biggest lever on your total interest is the shape of your payment. A fixed payment is a flat dollar amount you pay every month regardless of the balance — say $235 until the card is clear. A minimum payment is a percentage of the balance (commonly 2%, with a $25 floor), so it shrinks as the balance shrinks.
That difference compounds dramatically. Take the default scenario above — $5,000 at 22.99% APR. A fixed payment that clears it in 24 months costs about $1,280 in interest. Paying only the 2% minimum starts at about $100 a month but falls every cycle, stretching the payoff past two decades and piling up several times that interest before the balance finally dies.
The reason is simple: a fixed payment keeps attacking principal at full force even as the balance falls, while a minimum payment eases off exactly when you need it to push hardest. The two scenario cards in the calculator put the numbers side by side for your own balance and APR. To build a full month-by-month fixed-payment plan, use the credit card payoff calculator.
What Happens If You Only Pay the Minimum?
Minimum payments are designed to keep your account current and profitable — not to get you out of debt. Because the minimum is a percentage of a balance that's mostly interest at a 20-something percent APR, only a thin sliver of each payment touches principal. As the balance falls, the minimum falls with it, so each month you're paying less and making slower progress.
The practical result is a payoff measured in decades, not years. A mid-four-figure balance carried at a typical APR and paid at the minimum can take more than 20 years to clear and cost more in total interest than you originally borrowed. The calculator's "minimum payment only" card shows how long your specific balance would take and how much it would cost.
The fix is to pay a fixed amount — even a modest one above the minimum — and hold it steady as the balance drops. That single change is what collapses a 20-year payoff into a two- or three-year one. For the full breakdown of why the minimum keeps you stuck, see the minimum payment trap.
Frequently asked questions
How much interest will I pay on my credit card?
It depends on three things: your balance, your APR, and how fast you pay it down. The calculator above turns those into a single number. As a quick benchmark, a $5,000 balance at 22.99% APR paid off over 24 months costs about $1,280 in interest. Pay it off twice as fast (12 months) and the interest roughly halves; stretch it to the minimum payment and it balloons past the original balance. Interest is charged on what you still owe, so the faster the balance falls, the less interest accrues on it.
How is credit card interest calculated?
Most US card issuers use the daily balance method. They convert your APR to a daily periodic rate (APR ÷ 365), then charge that rate against your balance every single day of the billing cycle. At the end of the cycle they sum those daily charges into one interest figure. Because the rate compounds daily, a 22.99% APR works out to slightly more than 22.99% in effective annual cost. The calculator above uses monthly compounding, which lands within a dollar or two of the daily method for typical balances.
Does paying off my balance each month avoid interest?
Yes — that's the grace period. If you pay your statement balance in full by the due date every month, most cards charge zero interest on purchases. Interest only starts when you carry a balance past the due date. Once you do, many cards suspend the grace period until you've paid in full for a couple of cycles, which means new purchases start accruing interest from the day they post.
What APR should I use in the calculator?
Use the purchase APR printed on your statement or in your card's online account — it's the rate that applies to carried balances. The average US credit card APR sits in the low-to-mid 20s, but yours could be anywhere from the mid-teens to 30%+ depending on the card and your credit. If your card has separate rates for purchases, balance transfers, and cash advances, use the one that matches the balance you're carrying.
Why does paying the minimum cost so much more?
Minimum payments are calibrated to keep the balance alive, not retire it. A typical minimum is 2% of the balance (or a $25 floor), and at a 20-something percent APR most of that payment is swallowed by the interest charge — only a thin sliver touches principal. As the balance falls, so does the minimum, so progress slows to a crawl. The result is a payoff that can stretch past 20 years and cost more in interest than you originally borrowed.
Is this calculator's interest figure exact?
It's a close estimate for planning, not a billing statement. Real interest depends on your exact statement dates, when payments post, whether you make new purchases, and your issuer's specific minimum-payment formula. The calculator assumes a fixed balance with no new charges and a level monthly payment. Use it to understand the size of the interest cost and how payoff speed changes it — then confirm specifics against your own statement.
Related debt tools
How Credit Card Interest Works
The daily periodic rate, the grace period, and why carrying a balance is so corrosive.
Credit Card Payoff Calculator
Pick a target date or a monthly payment and get the full month-by-month payoff plan.
The Minimum Payment Trap
Why paying only the minimum keeps the balance alive for decades — worked out in full.
Minimum Payment Calculator
Run the minimum-payment simulation month by month for your own balance and APR.
Estimates are educational only. The calculator assumes a fixed balance with no new purchases, a level monthly payment for the fixed-payment scenario, and a 2%-or-$25 minimum-payment rule for the comparison. Real interest depends on your statement dates, when payments post, and your issuer's specific minimum-payment formula — check your own statement for exact figures.