Credit Card Interest Rate Analyzer
Determine your effective APR based on interest charged and balance.
365 Days (Standard)
360 Days (Bank Method)
366 Days (Leap Year)
Daily Periodic Rate (DPR):
0.00%
Monthly Periodic Rate:
0.00%
Calculated Annual Percentage Rate (APR):
0.00%
*This rate is derived from your finance charge. It represents the annualized cost of your borrowing for this specific cycle.
How to Calculate Percentage Rate on Credit Cards
Understanding how credit card issuers calculate your interest is crucial for financial health. While the Annual Percentage Rate (APR) is the headline number seen on offers, the actual calculation of your monthly finance charge relies on the Daily Periodic Rate (DPR) and your Average Daily Balance.
This calculator works in reverse: it takes the interest you were actually charged on your statement and calculates the effective APR applied to your balance. This helps you verify that the bank is charging you the rate agreed upon in your cardholder agreement.
The Core Formula
Credit card interest is typically calculated using the following logical flow:
- Determine Daily Rate: Divide the APR by 365 (or 360 in some banking systems).
- Determine Daily Interest: Multiply the Daily Rate by your daily balance.
- Sum for Cycle: Add up the daily interest charges for every day in the billing cycle.
To reverse this and find your rate, the math is:
APR = (Interest Charged / (Average Daily Balance × Days in Cycle)) × 365 × 100
Key Variables Explained
- Interest Charged: The specific dollar amount listed as "Finance Charge" or "Interest Charge" on your monthly statement.
- Average Daily Balance: This is not simply your ending balance. It is the sum of your balance at the end of each day in the billing cycle, divided by the number of days in that cycle. Most statements list this figure specifically in the "Interest Charge Calculation" section.
- Days in Billing Cycle: The number of days between your previous statement closing date and current statement closing date (usually between 28 and 31 days).
Why Your Calculated Rate Might Differ From Your Card's APR
If the result from this calculator differs slightly from your card's stated APR, consider these factors:
- Compound Frequency: Some issuers compound interest daily, while others calculate simple interest on the average daily balance.
- Grace Periods: If you had new purchases and previously paid in full, some of your balance might not have accrued interest for the full cycle.
- Different Transaction Types: Cash advances and balance transfers often have different APRs than standard purchases. If your balance is a mix of these, your "effective" rate will be a weighted average.
By monitoring this rate, you can ensure you aren't paying more than expected and better understand the true cost of carrying a balance.