Credit Card Interest Calculator

If you don't pay your full statement balance by the due date, the issuer charges interest on what's left, generally using a daily rate on your average daily balance. Interest usually starts adding up on new purchases immediately until you've paid in full, because you lose the grace period. It's added to your balance, so you may end up paying interest on interest.

Most issuers use the average daily balance method. They add your balance at the end of each day, divide by the number of days in the cycle, then multiply by the daily rate (APR / 365) and the number of days. With a $2,000 average balance, a 22% APR and 30 days, interest is about 2,000 x (0.22 / 365) x 30 = $36.16.

It depends on the balance, APR and how quickly you pay. On $5,000 at 22%, paying it off over 1 year costs about $616, and over 5 years, about $3,286. Use the calculator above for your own numbers. If you're paying the minimum, check the payoff box on your statement, which shows how long it would take.

At 24% APR, $1,000 costs about $20 a month, or about 66 cents a day. If you pay it off over a year with fixed payments, you'd pay about $95 a month and $135 in total interest. If you pay it in full by the due date on a card where you don't already carry a balance, it usually costs nothing.

Lower is better, and it's relative to what's available for your credit tier. Cards with lower APRs, often offered by credit unions, can save you real money if you carry a balance. If you pay in full each month, the rate rarely matters, and you could focus on rewards and fees. Check your own rate on your latest statement, since it can change with the prime rate.

Anything well above average for your credit level. Store cards and cards for people with lower credit scores are often among the most expensive. Penalty APRs, which can apply if you pay late, can be higher still. If yours seems high, call and ask for a reduction, particularly if you've paid on time. It's a short call, and a lower rate could save you plenty.

Your rate is quoted yearly, most issuers calculate it daily, and it's charged on your monthly statement. Dividing your APR by 12 gives an estimate of the monthly rate: 18% is about 1.5% a month. Daily compounding makes the true yearly cost a little higher than the APR, with 18% working out to about 19.7% if the balance stays the same.

Pay your full statement balance by the due date every month. Most cards give you a grace period of at least 21 days after the statement closes on new purchases. Cash advances usually start charging interest immediately, often at a higher rate. Also, 0% introductory offers can help, if you pay off the balance before the promotion ends.

It usually is if you can clear most of the balance during the promotional period and you stop adding new charges. Most cards charge a fee of 3% to 5%. Moving $6,000 from a 24% card to 0% for 18 months with a 3% fee, and paying $235 a month, saves $2,092. Even at a 5% fee, it saves $1,946. Choose "Compare one" above to test your own offer.

Paying off a high-rate card is like earning a guaranteed return equal to its APR, which few investments can match. Many people first contribute enough to a retirement plan to get an employer match, then focus on high-rate debt. Once that's gone, redirect the payment into investing. Use our compound interest calculator to see what that money could do.

You may owe a late fee and could lose a promotional rate. Issuers can report a payment that's 30 days late to the credit bureaus, where it may stay for up to seven years. Payment history is the largest factor in FICO scores. If you've missed a payment, pay as soon as you can and ask whether the issuer will waive the fee.

Often decades. With a minimum of 1% of the balance plus interest and a $25 floor, $6,000 at 24% takes 21 years and costs $10,887 in interest, more than the original balance. A fixed $235 a month clears it in 3 years for $2,474. Enter your card's minimum formula above, which you'll find in your cardholder agreement.