Calculate your monthly interest charges and effective annual rate based on your daily balance.
Calculation Summary
Daily Periodic Rate (DPR):0%
Interest Charged This Cycle:$0.00
Total Monthly Cost (Interest + Fees):$0.00
Effective Annual Rate (EAR):0%
How Credit Card APR Actually Works
Annual Percentage Rate (APR) is the standard way credit card companies express the cost of borrowing over a year. However, credit cards do not charge interest once a year. Instead, most card issuers use a Daily Periodic Rate (DPR) to calculate interest every single day based on your average daily balance.
The Formula Behind the Math
To understand your credit card statement, you need to break down the calculation into three specific steps:
Step 1: Convert APR to Daily Rate. Divide your stated APR by 365. For example, a 24% APR becomes a 0.0657% daily rate (0.24 / 365).
Step 2: Calculate Daily Interest. Multiply your Average Daily Balance by the Daily Periodic Rate.
Step 3: Calculate Monthly Charge. Multiply that daily interest amount by the number of days in your billing cycle (usually 28 to 31 days).
Effective vs. Nominal APR
The APR printed on your card agreement is the "Nominal APR." Because credit cards compound interest daily, the actual amount of interest you pay over a year (if you don't pay it off) is higher than the stated rate. This is known as the Effective Annual Rate (EAR) or Annual Percentage Yield (APY).
Example Calculation
If you have an average daily balance of $1,000 on a card with 20% APR for a 30-day month:
Daily Rate: 20% / 365 = 0.05479% per day.
Daily Interest: $1,000 * 0.0005479 = $0.5479 per day.
Monthly Interest: $0.5479 * 30 = $16.44.
Tips to Reduce Credit Card Interest
The most effective way to avoid interest is to utilize the Grace Period. If you pay your statement balance in full every month by the due date, most cards do not charge any interest on new purchases. However, once you carry a balance (revolve), the grace period usually vanishes, and interest begins accruing on every purchase from the date of the transaction.
function calculateCCAPR() {
var balance = parseFloat(document.getElementById('ccBalance').value);
var aprInput = parseFloat(document.getElementById('ccApr').value);
var days = parseInt(document.getElementById('ccDays').value);
var fees = parseFloat(document.getElementById('ccFees').value) || 0;
if (isNaN(balance) || isNaN(aprInput) || isNaN(days) || balance < 0 || aprInput < 0 || days <= 0) {
alert('Please enter valid positive numbers for balance, APR, and days.');
return;
}
// 1. Calculate Daily Periodic Rate (DPR)
var decimalApr = aprInput / 100;
var dpr = decimalApr / 365;
// 2. Interest Charge = Balance * DPR * Days
var interestCharge = balance * dpr * days;
// 3. Total monthly cost
var totalMonthly = interestCharge + fees;
// 4. Effective Annual Rate (EAR)
// EAR = (1 + (r/n))^n – 1 where n is 365
var ear = (Math.pow(1 + (decimalApr / 365), 365) – 1) * 100;
// Display results
document.getElementById('resDPR').innerText = (dpr * 100).toFixed(5) + "%";
document.getElementById('resInterest').innerText = "$" + interestCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resEAR').innerText = ear.toFixed(2) + "%";
document.getElementById('aprResult').style.display = 'block';
// Scroll to result smoothly
document.getElementById('aprResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}