Credit Card APR & Interest Calculator: What That Rate Actually Costs You

Reviewed by CC Payoff Calc Editorial Team. Last verified May 2, 2026.

A 22.30% APR sounds abstract. The dollar cost it produces every month is not. This calculator turns your APR into the monthly interest charge, the total interest over the life of your debt, and the time-to-payoff under different payment scenarios.

Plan

TL;DR in 90 seconds

Daily interest on a credit card = APR / 365, applied to your balance each day, summed for the month. On a $5,000 balance at 22.30% APR, that comes out to about $93 in interest the first month. Of every $250 monthly payment, $93 is interest and $157 chips at the principal. That is why minimum-only payments take so long: most of each payment is interest, not principal.

The Federal Reserve's G.19 release reports Q1 2026 average APR of 21.00% across all accounts and 21.52% on accounts assessed interest. The CFPB's 2025 Consumer Credit Card Market Report puts 2024 general-purpose-card averages at 22.30%, with private label store cards at 28.93% and deep subprime at 31.3%.

Why APR matters more than interest rate

They are the same number on credit cards. APR (annual percentage rate) is the legal disclosure term. The "interest rate" or "purchase APR" on your statement is the same number. Unlike mortgages, credit card APR does not include fees in the calculation; the fee structure is disclosed separately.

What this means: comparing APRs across cards is apples-to-apples. The card showing 26.99% costs you exactly 5 percentage points more than the card showing 21.99%, every day, on the balance you carry.

What 1 percentage point of APR is worth in dollars

On a $5,000 balance carried for a year, every percentage point of APR is roughly $50 in interest. That makes the math on small APR differences clearer:

18% to 22%: 4 points = ~$200/year extra
22% to 27%: 5 points = ~$250/year extra
22% to 31% (subprime): 9 points = ~$450/year extra
22% to 0% (balance transfer promo): 22 points = ~$1,100/year saved (less the transfer fee)

These are linear approximations on the average balance. The calculator below computes exact figures using the daily-balance method.

Calculator

What the calculator computes

You enter:

Current balance
APR (find it on your statement)
Either: monthly payment OR target months to payoff

You get:

Total interest paid until balance is zero
Months to payoff
Per-month breakdown: interest accrued, principal applied, ending balance
Comparison view: same balance at 0% APR and at minimum-only

The math runs in your browser. Card data does not leave your device.

How the daily-balance method works

Most U.S. credit card issuers calculate interest using the average daily balance method. Each day, your balance is multiplied by the daily periodic rate (APR / 365). At the end of the billing cycle (typically 30 days), the daily interest amounts are summed.

A practical effect: if you make a payment mid-cycle, the days after your payment have a lower balance and therefore lower daily interest. This is why paying earlier in the cycle (or paying twice a month) reduces interest faster than the headline APR suggests. We model this in Biweekly payment calculator credit card.

Variable APR vs fixed APR

Most credit cards have variable APRs that move with the prime rate. When the Federal Reserve raises rates, your APR usually goes up within 1-2 billing cycles. When rates fall, the APR drops similarly.

Your card's terms specify the formula (typically "prime + X.XX%"). The latest prime rate is published in the Federal Reserve H.15 release. As of Q1 2026, prime was around 8.5%, and most credit cards run prime + 12 to 20 points (giving the 21-29% APRs seen in market data).

Because APRs change, the calculator's output is a current-rate snapshot. If rates change during your payoff period, the actual interest paid will differ.

Strategies

The minimum payment trap, in numbers

The CFPB-typical minimum payment formula is 1% of principal plus current-month interest, with a $25 floor. On a $5,000 balance at 22.30% APR:

Month 1 minimum: $50 (1% of $5,000) + $93 (interest) = $143
Month 1 principal applied: $50
Month 1 ending balance: $4,950
Month 2 minimum: $49.50 + $92 = $141.50
Month 2 principal applied: $49.50
Month 2 ending balance: $4,900.50

At this rate, the balance dies in 196 months and costs $7,184 in interest. That is more than the original principal. (Minimum payment trap calculator has the personalized version.)

The CARD Act of 2009 requires every credit card statement to show a "minimum payment warning" box with the months-to-payoff at the minimum payment. Read it. The number is usually 15+ years.

What happens when you pay double the minimum

Same $5,000 at 22.30%, paying $286/month (2x the first-month minimum):

Month 1 ending balance: $4,807 (vs $4,950 at minimum)
24 months to payoff (vs 196)
$1,346 total interest (vs $7,184)

Doubling the minimum cuts time by 88% and interest by 81%. The math is non-linear because most of the minimum payment is interest, so the marginal extra dollar goes almost entirely to principal.

Why 28.93% (store card APR) is so much worse than 22.30% (general purpose)

On a $5,000 balance carried for 36 months at $200/month payment:

At 22.30% APR: 33 months to payoff, $1,490 interest
At 28.93% APR: 38 months to payoff, $2,401 interest

Store cards charge 6.6 percentage points more on average per CFPB 2025 data. On a $5,000 balance, that is about $911 extra interest over 38 months. We cover the store card math on Store credit card payoff calculator.

The "what is my actual rate" question

Look at your most recent statement. There is a section, usually titled "Interest Charge Calculation" or "Account Summary," that lists each balance type (purchases, cash advances, balance transfers) and the APR for each. Cash advance APRs are typically 5-10 percentage points higher than purchase APRs.

If you have a "promotional APR" (often 0% on balance transfers or purchases for a set period), the statement will show it separately. The promo balance has its own minimum payment calculation and post-promo APR.

Resources

Spokes in this hub

Minimum payment trap calculator , what minimum-only actually costs
Extra payment credit card calculator , how $50 a month extra changes the math

Card-specific APR pages

Related hubs

Credit card payoff calculator (home) , pillar tool
Avalanche vs snowball method
Balance transfer calculator , getting your APR to 0% temporarily

FAQ

Frequently asked questions

How is credit card interest calculated?

Daily compounding using the average daily balance method. Daily rate = APR / 365. Each day's balance is multiplied by the daily rate; the daily interest amounts are summed for the billing cycle.

What is the average credit card APR in 2026?

Per the Federal Reserve G.19, Q1 2026 average APR across all accounts is 21.00%. On accounts assessed interest (the rate that applies if you carry a balance), 21.52%. The CFPB 2025 report shows 22.30% average for general-purpose cards in 2024, 28.93% for store cards.

Is APR the same as interest rate on a credit card?

Yes. They are interchangeable terms for credit cards. On mortgages and auto loans, APR includes certain fees and is therefore higher than the headline interest rate; on credit cards, APR equals the periodic interest rate.

Why does my interest charge change month to month?

Three reasons: (1) your balance changes (most months), (2) your payment timing within the cycle changes, (3) the APR may be variable and tied to the prime rate. The calculator assumes a fixed APR for projection purposes; real-world results may drift slightly.

What happens if my payment is late?

Two effects. First, late fee (typically $30-40, capped at $40 by CARD Act regulations). Second, on most cards, your APR can be increased to a "penalty APR" (typically 29.99%) for at least 6 months. The penalty APR applies to existing balances, not just new purchases, in some cases. Read your card terms carefully.

Can I negotiate my credit card APR down?

Sometimes. Cardholders with good payment history and a long account tenure can call the issuer and ask for an APR reduction. Success rates per industry surveys: roughly 50% of callers who ask receive a 1-3 percentage point reduction. Worth the 10 minutes; have a competing offer ready as leverage.

How does promotional APR work?

The promotional APR (often 0%) applies to a specific balance type (balance transfers, purchases) for a defined period (12-21 months). After the promo ends, any remaining promo balance accrues interest at the regular APR. Some cards specify retroactive interest if you miss a payment during the promo; check your card terms.

What is a deferred interest promotion?

A specific type of "0% APR" common on store cards. If you do not pay the entire balance off before the promo ends, all the interest that would have accrued during the promo is charged retroactively. Different from regular 0% balance transfer offers. Read the disclosure carefully. (CFPB deferred interest guide.)

Does carrying a small balance help my credit score?

No, that is a myth. Reporting a $1 balance and reporting a $0 balance are nearly identical for credit scoring purposes. Pay your card to zero each month if you can; carrying any balance costs you interest with no scoring benefit. (Consumer Financial Protection Bureau guide.)

Why is my cash advance APR higher than my purchase APR?

Cash advances are higher-risk for issuers and have no grace period (interest accrues from day 1). Cash advance APRs run 5-10 percentage points above purchase APRs on most cards. Avoid cash advances if at all possible.

Sources

Federal Reserve G.19 Consumer Credit, accessed 2026-05-03.
Federal Reserve H.15 Selected Interest Rates, accessed 2026-05-03.
CFPB 2025 Consumer Credit Card Market Report, accessed 2026-05-03.
CFPB Regulation Z (CARD Act implementation), accessed 2026-05-03.
Consumer Financial Protection Bureau, Credit Score Myths, accessed 2026-05-03.

Not financial advice. Calculations are estimates based on the inputs you provide. Consult a non-profit credit counselor (NFCC member) or licensed financial advisor before making major debt-management decisions.

This is a syndicated post. Original article + interactive calculator: https://ccpayoffcalc.com/credit-card-apr-interest-calculator/

Credit Card APR Calculator: True Cost of Your Rate