Credit card interest calculator
See the real cost of carrying a credit card balance — total interest, time to pay off, and how much your debt actually costs.
Calculator debtLogic updated April 2026
This calculator simulates a credit card balance month-by-month: interest accrues on the balance, your fixed monthly payment chips at it, and any new spending you add gets layered on. It shows how long it takes to pay off the balance, how much interest you'll pay along the way, and — critically — flags the trap where your payment is barely covering the interest charge.
How this is calculated
Formula
Each month: interest = balance × rate / 12 ; principalPaid = max(0, payment − interest) ; balance = balance − principalPaid + additionalSpendStep-by-step
- Calculate the monthly interest rate as the annual rate divided by 12
- Each month, accrue interest on the current balance
- Subtract the monthly payment from the balance plus interest — the principal portion is the payment minus the interest charge
- If your payment doesn't exceed the first month's interest plus any additional spending, the balance grows indefinitely — the engine flags this and refuses to run a meaningless simulation
- Add any additional monthly spending to the new balance after the payment is applied
- Repeat until the balance reaches zero or the simulation cap of 600 months is hit
- Sum monthly interest charges to get total interest paid over the life of the balance
- Rounding mode
- ROUND_HALF_UP
- Precision
- 20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
- Logic last reviewed
Assumptions & limitations
What this calculator assumes
- Interest accrues monthly at (annual rate / 12)
- Monthly payment is fixed for the life of the balance
- Additional monthly spending is added to the balance after each payment
- Simulation is capped at 600 months (50 years) to bound analysis
- No grace period is modelled — interest is charged on the full carried balance
What this calculator doesn’t account for
- Does not model daily compounding (real card APRs typically compound daily, not monthly — this is a close approximation)
- Does not include late fees, over-limit fees, cash advance fees, or balance transfer fees
- Does not factor in promotional 0% periods or balance-transfer rates expiring
- Does not model variable APRs that change with market rates
- Does not include rewards earned on the original purchases
Worked example
A cardholder has a $4,000 balance at 21% APR. They commit to paying $200 a month with no new spending.
| Input | Value |
|---|---|
| Starting balance | $4,000 |
| Annual rate | 21% |
| Monthly payment | $200 |
| Additional spend | $0/month |
Payoff time: ~24 months — Total interest paid: ~$842
Month 1: interest = $4,000 × 21% ÷ 12 = $70. Payment = $200, so principal = $130. New balance = $3,870. Month 2: interest = $3,870 × 21% ÷ 12 = $67.73. Principal = $132.27. Balance keeps falling because the payment comfortably exceeds the interest charge. The schedule clears in two years and the cardholder pays $842 in interest — about 21% on top of the original balance. If they'd added $100/month of new spending, the balance would barely move.
Frequently asked questions
How is credit card interest calculated?
Most issuers compute a daily periodic rate (annual rate ÷ 365) and apply it to your average daily balance, then bill the result monthly. This calculator uses a simpler monthly compounding (rate ÷ 12), which is within a fraction of a percent of the daily method for most cards. The structural insight is the same: interest is charged on the current balance every billing cycle, so reducing the balance reduces all future interest.
What is a grace period?
A window — typically 21–25 days from statement date — during which you can pay your statement balance in full and avoid being charged any interest on new purchases. If you carry a balance past the grace period, interest applies retroactively from the purchase date. This calculator models a balance you're already carrying, so the grace period doesn't apply — every dollar of balance accrues interest from day one.
Daily vs monthly compounding?
Daily compounding produces marginally more interest than monthly at the same APR (roughly 1–3% higher annually at typical card rates). Most cards advertise APR but apply a daily periodic rate to the average daily balance — that's why your statement interest sometimes seems higher than (balance × APR ÷ 12). This calculator's monthly approximation is close enough for planning; real statements will be a touch higher.
Why does my balance barely decrease?
Because most of each minimum payment is going to interest, not principal. On a $5,000 balance at 22% APR, monthly interest alone is about $92. A 2% minimum payment is around $100 — leaving just $8 of principal reduction. That's why minimum payments can take decades to clear a balance. The fix is paying meaningfully more than the minimum, ideally a fixed dollar amount that doesn't shrink as the balance shrinks.
What if my payment doesn't cover the interest?
The balance grows every month — interest is charged on a larger balance the following month, which means even more interest, and the snowball runs the wrong way. The calculator detects this case and refuses to simulate, because the answer would be 'never paid off'. The fix is to increase the monthly payment so it exceeds the first month's interest plus any new spending, or to stop using the card and lock in a payment that's at least 2× the current minimum.
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