# Credit Card Interest Calculator: Estimate Your Payoff Date

You may be wondering how credit card interest is calculated. Your issuer will either calculate interest daily or monthly; this is outlined in your credit card terms, but many card issuers calculate interest daily.

For cards that use a daily balance, you’ll need to divide your APR by 365 days. For example, an APR of 16.15% would have a daily percentage rate of 0.000442.

Next, you’ll need to calculate your average daily balance. You can do this by checking to see how many days your billing cycle is and then figuring out the exact daily balance for all of those days. Add up the balance for each date of your billing cycle. Then, divide it by 25 to get the average daily balance.

For simplicity, let’s say your billing cycle is 25 days, and your average daily balance is \$2,920. To calculate your interest charges, take the average daily balance and multiply it by the daily rate. Then divide that amount by the number of days in your billing cycle. For our example, \$2,920 x 0.000442 = 1.29 x 25 = \$32.25 in interest.

To quickly figure out how much interest you’ll pay over time, use our credit card interest calculator.