Estimated cycle interest and supporting figures
Daily rate is APR divided by 100 and the selected annual day basis. The compound method adds each day’s interest to the next day’s balance; the simple method keeps the balance unchanged.
For a year-based noncompounding interest interval, use the Simple Interest Calculator with its documented annual-time convention.
The formula
Daily rate is APR divided by 100 and the selected annual day basis. The compound method adds each day’s interest to the next day’s balance; the simple method keeps the balance unchanged.
Worked credit card interest example
A constant 1,000 balance at 24% APR over 30 days using a 365-day basis incurs about 19.73 without daily compounding. The compounded estimate is slightly higher.
How to use this calculator
- Enter balance held throughout cycle, annual percentage rate, billing-cycle days, annual day basis.
- Set interest method using the stated units or choices.
- Calculate and compare estimated cycle interest, balance plus cycle interest, daily periodic rate.
Choosing inputs for credit card interest
Use the APR for the balance type being measured. Purchases, cash advances, and transfers can have different rates. This estimate assumes one balance category and does not apply a purchase grace period, so it is only useful when interest actually applies for the entered days.
Daily compounding and noncompounding daily-balance methods differ in whether unpaid interest enters subsequent daily balances. Choose the method and day basis in your card agreement. Selecting 360 instead of 365 increases the daily rate for the same APR; it does not shorten or alter the actual billing-cycle day count.
Interpreting estimated cycle interest
The constant-balance assumption is deliberate. If purchases or payments change the balance during the cycle, the result will not reproduce the statement. For a noncompounding method, an accurately computed average daily balance can serve as the input. A daily-compounding account with transactions needs a dated transaction schedule rather than a single average balance.
Assumptions & limitations
What this calculation assumes
- One APR applies for every entered day and there are no transactions.
- No grace period or minimum finance charge changes the result.
What to keep in mind
- Fees, rate changes, multiple balance types, daily rounding, and transaction dates are excluded.
Common questions
Can I enter an average daily balance?
For the noncompounding estimate, yes, if it is calculated for the same billing period. A compounded transaction schedule cannot generally be replaced by a simple average.
Why might my statement differ?
Its agreement may use transactions, grace periods, rounding, fees, and separate rates not present in this constant-balance estimate.
Does this include a purchase grace period?
No. It assumes the entered balance accrues interest for every selected day; check whether your agreement actually charges interest.
Sources & further reading
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