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How card interest is charged
Most cards use a daily periodic rate (APR ÷ 365) on your average daily balance. Monthly interest ≈ balance × APR ÷ 12. If you pay the full statement balance by the due date, most cards charge no interest on purchases (the grace period).
Monthly interest by balance and APR
| Balance | 18% | 22% | 26% | 30% |
|---|---|---|---|---|
| $1,000 | $15.00 | $18.33 | $21.67 | $25.00 |
| $3,000 | $45.00 | $55.00 | $65.00 | $75.00 |
| $5,000 | $75.00 | $91.67 | $108.33 | $125.00 |
| $10,000 | $150.00 | $183.33 | $216.67 | $250.00 |
| $20,000 | $300.00 | $366.67 | $433.33 | $500.00 |
Sources and assumptions
- Payoff uses monthly compounding at APR ÷ 12, a close approximation to daily compounding.
- CFPB: how card interest is calculated
Related
Frequently asked questions
How much interest will I pay on $5,000 at 22%?
About $92 a month while the balance stays at $5,000.
How do I avoid credit card interest?
Pay the full statement balance by the due date each month to keep the grace period.