Credit Card Interest Calculator
Calculate monthly and daily credit card finance charges using the standard daily periodic rate and average daily balance method.
Credit Card Daily Balance Interest Formula
Daily Periodic Rate (DPR) = APR / 365 | Monthly Interest = Balance × DPR × Billing Cycle Days | Principal Paid = Payment − Monthly Interest- Daily Periodic Rate (DPR): The annual APR divided by 365 days.
- Billing Cycle: Standard monthly cycles typically range between 28 and 31 days.
- Negative Amortization Warning: If your monthly payment is less than or equal to the monthly interest, your balance grows rather than shrinks.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Assumes a constant balance across the billing cycle using standard US average daily balance methodology.
Frequently Asked Questions
How do credit card companies calculate daily interest?
They divide your APR by 365 to find the Daily Periodic Rate (DPR), then multiply this rate by your balance at the end of each day, adding the charges up at the close of your billing cycle.
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