This credit card interest calculator figures how much of your monthly payment is applied to principal and how much is interest. It then tells you how many months until the card is paid off (assuming no additional charges) and your total interest cost until payoff.
Is Your Credit Card Costing You Too Much?
Whether you're paying off existing debt or considering using a credit card to finance a new purchase, you may be able to save hundreds---even thousands---by taking a minute to shop for the best credit card for your situation.
Visit our partner, Cardratings, to compare balance transfer credit cards which offer 0% intro APRs for 18 months or more on transferred balances. Likewise, if you're considering financing a new purchase, see the top 0% intro APR credit cards offering 12 months or more of interest-free financing.
Need longer than two years to pay off an existing debt or a new purchase? A fixed-payment personal loan may charge less interest than a credit card. See our list of the best personal loans for debt consolidation.
How Much Credit Card Interest Will You Pay?
Ever feel like you'll never pay off your credit cards? Can't fathom how much interest you're paying?
What if you could know exactly how much interest you're paying, and when you'll get to say goodbye to your credit card debt?
Thankfully, our Credit Card Interest Calculator will transform these uncertainties into knowledge you can use to formulate your debt reduction strategy.
How Much Interest Will You Pay?
The amount of interest you pay is calculated based on your annual interest rate, balance, and how much you pay each month. Fortunately, this Credit Card Interest Calculator makes the math easy. Simply input the variables, click the “Calculate Credit Card Interest” button, and you'll learn not only the total amount of interest you'll pay, but also:
- The amount of your next payment that will be applied to principal
- The amount of your next payment that will be applied to interest
- The number of monthly payments until your balance reaches zero
- The number of years until your balance reaches zero
In addition, you can lower the overall amount of interest you'll pay by negotiating a lower interest rate or increasing your payments. The more creative you get, the less you'll pay!
Related: 5 Financial Planning Mistakes That Cost You Big-Time (and what to do instead!) Explained in 5 Free Video Lessons
How Credit Card Interest Works
Although credit card interest rates are set annually, they will charge you interest daily and bill you monthly. Credit card companies calculate interest based on your average daily balance. That means that if you are not paying your credit card balance in full, you will not only pay interest on purchases but also on the interest itself!
The average daily balance method is used to level out the day-to-day fluctuations caused by payments and purchases making it easier to calculate interest. The average daily interest rate is usually shown on billing statements but few customers understand the implications. Most people just see the aggregate finance charge on their bill and have no idea that it represents a cumulative tally of each day's interest charges for the entire month.
How To Avoid Credit Card Interest
Smart consumers don't waste their money on credit card interest and employ a variety of strategies to minimize charges.
The ideal strategy is to pay your bill in full before the due date so you don't get charged interest. But if you take cash out of an ATM with your credit card, or pay anything less than the full amount on your statement, you will incur finance charges.
Credit card companies offer a specified number of interest-free days (often 44 to 55 days) as a grace period to give you time to pay your bill without interest. However, as soon as you let a balance carry over to another billing cycle then you'll lose the grace period privilege and have to earn it back by paying your balance in full during two successive months.
Cash advances are usually excluded from the grace period rule. In other words, there are no interest-free days for cash advances, and there’s usually a service fee to pay as well. Interest on cash advances is charged immediately from the day the money is withdrawn.
The best strategy is to avoid cash advances and pay your credit card bills in full every month.
Remember: Credit cards are convenient tools that can be used to your advantage, but you must be careful and stay out of debt. Only buy what you can afford to pay for immediately.
Already in debt? Don't worry. Calculate credit card interest and payoff time-frames by running some scenarios through our Credit Card Interest Calculator. Realize the cost of staying in debt, make a payoff plan, and get out of debt!
Credit Card Interest Calculator Terms & Definitions
Understanding the different credit card terms and how interest is calculated is an important step to becoming an educated consumer and using your credit card more effectively.
- Balance Owed – The total outstanding balance you must pay including interest.
- Annual Percentage Rate (APR) – Also known as the annual interest rate, it is applied to your credit card purchases that were not paid in full each month.
- Annual Fee – The amount you pay every year to your credit card company for maintaining your credit card.
- Average Daily Balance – The base amount used to calculate credit card interest charges.
- Finance Charge – Interest charged for borrowed money.
- Monthly Payment – The amount of money applied to the balance on a monthly, consistent basis.
- Grace Period – The period during which you won't pay interest on your credit card balance even if it is past due.
- Minimum Payment – The lowest amount that you are required to pay each month to keep your credit card account in good standing.
- Cash Advance – A service allowing cardholders to withdraw a certain amount of cash from an ATM, bank, or other financial institution.
- Interest – The amount paid for borrowing money.
- Principal – The original amount of money borrowed, not including interest. Be aware that when interest compounds, interest is absorbed into the principal.
Related Credit Card Calculators For Debt Payoff
- Credit Card Comparison Calculator: Which credit card is the best deal?
- Credit Card Minimum Payment Calculator: How long will it take to pay off my credit card and how much will it cost me if I make only the minimum payments?
- Debt Snowball Calculator: How fast can the rollover method get me out of debt and how much will I save?
- Credit Card Payoff Calculator: How long until I pay off my credit card debt using a variety of payment strategies? Includes printable amortization schedule.
- Credit Card Payment Calculator: Which repayment strategy will cost the least and get me out of debt the fastest?
- Debt Payoff Calculator: How much must I pay each month to be out of debt by any selected date?
- Debt Consolidation Calculator: How much will I save by consolidating my debts into one loan versus paying them individually?
- Debt Reduction Calculator (With Amortization Schedule): How fast can I get out debt and how much will I save by adding a fixed amount to each monthly payment?
- Debt Repayment Calculator: How fast can I get out debt and how much will I save by adding a one-time additional payment to principal?
- Debt Calculator: How long will it take to get out using my current payment plan?
Compare Top Credit Card Offers
The Financial Mentor partners with Cardratings to show you relevant credit card offers. If you're looking to save money on interest or find a higher-value rewards card, check out today's top card offers now:
- 0% APR Credit Cards
- Balance Transfer Credit Cards
- Cash Back Credit Cards
- Travel Rewards Credit Cards
- For Business Credit Cards
- For Fair/Average Credit Credit Cards
- Browse All Cards