Credit card interest can significantly increase the total cost of your purchases if you don't pay off your balance in full each month. This calculator helps you estimate the interest you might pay in a single billing cycle, considering your current balance, the annual interest rate, the minimum payment, and any additional payments you plan to make.
How Credit Card Interest is Calculated:
The calculation of credit card interest typically involves several steps, but for a single billing cycle, the simplified approach used by this calculator is as follows:
Average Daily Balance: While credit card companies use your Average Daily Balance, for simplicity in a single-month calculation, we often use the Current Balance as a close approximation, especially if there were no new purchases or payments during the billing cycle.
Daily Periodic Rate: The Annual Interest Rate (APR) is divided by the number of days in the billing cycle (typically 30 or 31). For this calculator, we'll use a standard 30-day month for simplicity:
Daily Rate = Annual Interest Rate / 365
(Note: Some might use 30 days, but dividing by 365 is more common for periodic rates).
Interest Calculation: The interest charged for the billing cycle is approximately:
Monthly Interest = Current Balance * (Annual Interest Rate / 100) / 12
Or, more precisely, using the daily rate and assuming the balance remains constant for the month:
Monthly Interest = Current Balance * Daily Rate * Number of Days in Billing Cycle
This calculator simplifies it to:
Estimated Monthly Interest = Current Balance * (Annual Interest Rate / 100) / 12
Payment Application: Your minimum payment (and any additional payment) will first be applied to the interest accrued, and then to the principal balance. However, this calculator focuses solely on the interest accrued *before* the payment is applied to estimate the interest cost for that period. The 'Additional Monthly Payment' input is factored in to reduce the balance for future interest calculations (though this specific calculator only estimates for one month).
Factors Affecting Interest:
Balance: A higher balance means more interest.
APR: A higher Annual Percentage Rate significantly increases interest costs.
Payment Amount: Paying more than the minimum reduces the principal faster, leading to less interest over time. Paying only the minimum can lead to paying significantly more than the original purchase price due to compounding interest.
Fees: Late fees or other charges can also increase your overall debt.
Use Cases for This Calculator:
Budgeting: Understand how much of your payment goes towards interest versus principal.
Debt Reduction Planning: See the impact of making extra payments to avoid interest charges.
Financial Awareness: Gain insight into the true cost of carrying a credit card balance.
Comparing Offers: Evaluate the potential interest costs of different credit cards.
Disclaimer: This calculator provides an estimation. Actual interest charged by your credit card company may vary based on their specific calculation methods (e.g., Average Daily Balance calculation, exact number of days in the billing cycle) and any promotional rates or fees.
function calculateInterest() {
var currentBalance = parseFloat(document.getElementById("currentBalance").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var minimumPaymentPercentage = parseFloat(document.getElementById("minimumPaymentPercentage").value);
var additionalPayment = parseFloat(document.getElementById("additionalPayment").value);
var interestResultElement = document.getElementById("interestResult");
// Input validation
if (isNaN(currentBalance) || currentBalance < 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(minimumPaymentPercentage) || minimumPaymentPercentage < 0 ||
isNaN(additionalPayment) || additionalPayment < 0) {
interestResultElement.textContent = "Invalid input. Please enter positive numbers.";
interestResultElement.style.color = "red";
return;
}
// Simplified calculation for one month's interest
// Monthly Interest Rate = Annual Interest Rate / 100 / 12
var monthlyInterestRate = (annualInterestRate / 100) / 12;
var estimatedInterest = currentBalance * monthlyInterestRate;
// Display the result, formatted to two decimal places
interestResultElement.textContent = "$" + estimatedInterest.toFixed(2);
interestResultElement.style.color = "var(–success-green)"; // Reset color on valid calculation
// Note: This calculator specifically estimates the interest accrued for the current month.
// It does not calculate the full amortization schedule or total interest paid over time.
// The additionalPayment is conceptually meant to reduce the balance going forward,
// but for a single month's interest estimation, it doesn't change the current month's accrued interest
// unless it's considered part of the payment applied *after* interest accrual.
// This calculation focuses on the interest *charge* for the period based on the current balance.
}