Finance Charge Calculator — Credit Card Interest
Work out the exact finance charge added to your credit card or revolving loan balance each billing cycle. Enter your balance, APR, and billing-period length to see the interest charged, the new balance, and how the debt compounds if left unpaid.
$
%
days
Calculation method
$
Interest charged for this billing period
- 1
Daily periodic rate
21.99% ÷ 365 = 0.06025% - 2
Average daily balance
(1,500 + 1,500) ÷ 2 = 1,500Payment assumed at the midpoint of the billing cycle, reducing the second half balance. - 3
Finance charge
1,500 × 0.06025% × 30 = 27.11
How does this calculator work?
Finance Charge = Average Daily Balance × (APR ÷ 365) × billing days. Enter your balance, APR, and the number of days in the billing cycle to see the exact interest added. Making payments mid-cycle lowers the average daily balance and reduces the charge. Paying the full statement balance each month avoids finance charges entirely.
Formula
How this is calculated
Most credit card issuers use the Average Daily Balance (ADB) method: they add up your daily balance for each day of the billing cycle and divide by the number of days. Any payment you make reduces the ADB from the day it posts. The daily periodic rate is APR ÷ 365, and the finance charge equals ADB × daily rate × billing days.
Two simpler alternatives exist. The daily periodic rate method applies (APR ÷ 365) × days directly to your ending balance — effectively the same as ADB when no payments are made during the period. The monthly periodic rate method divides APR by 12 and applies it to the ending balance regardless of the actual number of days — the approach used by some personal-loan statements.
The 12-month projection curve shows how a balance compounds if no further payments are made. Finance charges are legally disclosed in your card agreement — different issuers may use slightly different day-count conventions (360 vs 365-day years); this calculator uses 365. If your card compounds daily, the effective APR is slightly higher than the stated APR.
Frequently asked questions
The issuer records your balance at the end of each day during the billing cycle, sums those daily balances, then divides by the number of days. That average is then multiplied by the daily periodic rate (APR ÷ 365) and the number of days in the cycle. Payments post from the date received, reducing the average and therefore the charge.
Pay your full statement balance before the due date each month. Most credit cards have a grace period — if you pay in full, no finance charge accrues on new purchases. Once you carry a balance, however, new purchases typically begin accruing interest from the transaction date, so the grace period disappears until you're back to a $0 balance.
For credit cards, APR usually equals the simple interest rate because fees are disclosed separately. For mortgages and auto loans, APR is typically higher than the stated rate because it includes origination fees amortised over the loan term. Always check what your lender includes in APR to compare products fairly.
Also known as
TG we-Calculate Editorial Team. (2026). Finance Charge Calculator — Credit Card Interest [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/finance-charge-calculator
TG we-Calculate Editorial Team. "Finance Charge Calculator — Credit Card Interest." TG we-Calculate. 2026. https://we-calculate.com/calculator/finance-charge-calculator.
TG we-Calculate Editorial Team, "Finance Charge Calculator — Credit Card Interest," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/finance-charge-calculator
@misc{wecalculate_finance_charge_calculator, title = {Finance Charge Calculator — Credit Card Interest}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/finance-charge-calculator}}, year = {2026}, note = {TG we-Calculate} }
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