Knowing how interest is calculated helps you see the real cost of carrying a balance and motivates faster repayment.
Disclaimer: This article is for general educational purposes only and is not financial advice. Card terms, fees and rates vary by issuer and country, so always read the official terms or speak with a qualified adviser before applying.
Step 1: Find the Daily Rate
Divide your APR by 365. For 21.9% APR the daily rate is about 0.06%.
Step 2: Average Daily Balance
Add your balance for each day of the cycle and divide by the number of days.
Step 3: Multiply
Interest is roughly average daily balance x daily rate x days in cycle.
Example
| Average balance | APR | Days | Approx. interest |
|---|---|---|---|
| 1,000 | 21.9% | 30 | about 18 |
Use a Spreadsheet
A simple Google Sheets formula: =balance*(APR/365)*days. Try our online tools for quick percentage maths.
Frequently Asked Questions
Why does my statement show a different number?
Issuers may compound daily and treat different balance types separately.
Does paying mid-cycle reduce interest?
Yes, it lowers your average daily balance.
Conclusion
Run the numbers once and you will see why paying in full, or early, saves real money.
