How this calculator works
Multiply your interest-bearing average daily balance by the daily rate and cycle days. This assumes one rate category and no interest-free grace period. Fees and cash-advance rules are excluded. The formula does not add daily interest-on-interest; any daily capitalization must already be represented in the balances supplied to calculate the average.
Formula
Average daily balance B = sum of eligible daily balances / cycle days. Interest = B × r × d/Y, where r is the annual rate as a fraction, d cycle days and Y the contractual 365-day or 366-day denominator.
Worked example
An average daily balance of $1,500 at 19.99% for a 30-day cycle on a 365-day basis incurs $24.65 of interest. A $2,000 balance at 18% for 29 days on a 366-day basis incurs $28.52.
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Frequently asked questions
Can I use the balance at the end of the month?
Use the average of eligible daily balances. The ending balance matches that average only when the eligible balance was unchanged throughout the cycle.
Should I always use 366 in a leap year?
No. The agreement determines the daily-rate denominator. The default here is 365; use 366 only when specified.
What if I qualify for a grace period?
This calculation assumes interest applies. Check your agreement and payment history to determine which purchases, if any, qualify for interest-free treatment.