Finance Charge Calculator
A $1,000 balance at an 18% APR over a 30-day billing cycle adds about $14.79 in finance charge. This finance charge calculator estimates card interest from your purchase balance, APR, and billing-cycle length using a simple daily periodic rate. It works best when the balance stays unchanged for the full cycle.
Quick answer
This tool turns APR into a daily periodic rate by dividing the annual rate by 365.
This estimate uses a simple daily periodic rate with a 365-day year and assumes the same balance is carried every day of the cycle.
What this tells you
- •This tool turns APR into a daily periodic rate by dividing the annual rate by 365.
- •The finance charge rises with a larger balance, a higher APR, or a longer billing cycle.
- •This estimate assumes the same balance is carried every day of the cycle and focuses on the interest portion of the finance charge.
How to Use
- 1Enter the purchase balance you expect to carry through the billing cycle.
- 2Enter the APR from your card agreement or statement as a percent, such as 18 for 18%.
- 3Enter the billing-cycle length in whole days.
- 4Calculate to see the estimated finance charge, the total balance after the charge, and the daily rate used in the math.
How It Works
Formula
Daily rate = APR ÷ 365
Finance charge = Purchase balance x (APR ÷ 365) x Billing-cycle days
Total balance = Purchase balance + Finance charge
Example: $1,000 x (0.18 ÷ 365) x 30 = $14.79APR must be written as a decimal before you divide by 365 to get the daily periodic rate. That daily rate is applied to the balance for each day in the billing cycle. This tool uses a simple estimate, so it assumes the balance does not change during the cycle.
Calculation note: values are processed in the order shown above, using the current input units.
Worked Examples
A $1,000 balance at 18% APR for 30 days
An 18% APR becomes about 0.0493% per day in this calculator. Apply that daily rate across 30 days and the estimated finance charge is $14.79.
A $2,500 balance at 24% APR for 25 days
A higher APR and a larger carried balance push the finance charge up quickly, even over a slightly shorter cycle.
Estimated Finance Charge on a $1,000 Balance
These examples use the same simple daily-rate method as the calculator above and assume the balance stays unchanged for the whole cycle.
| APR | 25-day cycle | 30-day cycle | 31-day cycle |
|---|---|---|---|
| 15% | $10.27 | $12.33 | $12.74 |
| 18% | $12.33 | $14.79 | $15.29 |
| 24% | $16.44 | $19.73 | $20.38 |
Small changes in APR or cycle length can move the charge more than most cardholders expect, especially on a balance carried month after month.
Common mistakes
- Using the statement balance when part of it did not stay on the card for the full cycle
- Mixing up APR with the daily periodic rate shown on a statement disclosure
- Forgetting that late fees, cash-advance fees, and average daily balance rules can raise the actual finance charge
Limitations
This calculator uses a simple daily periodic rate based on a 365-day year and assumes the same purchase balance is carried every day of the billing cycle. Many issuers use average daily balance, separate APR buckets, grace-period rules, fees, or different day-count conventions. Because of that, your statement finance charge can differ from this estimate.