Most US cards use average daily balance × (APR ÷ 365) × days in the cycle. Model one or more billing cycles below — each month’s statement balance rolls into the next.

Educational only. This is a simplified model, not financial advice. Real issuers differ in rounding, how they treat fees and cash advances, minimum-payment formulas and grace-period rules. Check your cardholder agreement and your statement for the exact terms.

Plan summary

1 month

Total interest (all months)–

Current balance–

Next month’s interest if not paid–

Your card

APR (%)? Purchase APR from your statement — used for every month

Changing the APR recalculates every month in the plan.

Minimum payment

Issuers set their own formula. Two common types are shown here. If the balance is below the floor, the minimum is the whole balance.

Formula Percent of balance (%) Dollar floor ($)Often $25–$35

Payoff comparison

Starts from the new statement balance and assumes no new purchases. Each month, interest is added to the balance and then the payment is subtracted, so unpaid interest earns interest the next month (compounding). Months use APR ÷ 12. The simulation stops after 50 years.

Fixed monthly payment ($)

Minimum only: months–

Minimum only: total interest–

Fixed: months–

Fixed: total interest–

Balance over time

Minimum payment onlyFixed payment

How compounding works: first 6 months, fixed payment

Month	Start balance	+ Interest	− Payment	End balance

How it works

Definitions

APR (annual percentage rate): The yearly interest rate on your balance. Cards often have separate APRs for purchases, cash advances and balance transfers.
Daily periodic rate: The APR divided by 365 (some issuers use 360). It is the rate charged for one day.
Statement closing date: The last day of the billing cycle. Transactions up to this date go on that month's statement.
Statement balance vs. current balance: The statement balance is what you owed on the closing date. The current balance is what you owe right now, including newer purchases and payments since then.
Average daily balance: Add up the balance at the end of every day in the cycle, including new purchases and minus payments, then divide by the number of days.
Due date: The date your payment must arrive. Paying less than the minimum by then can bring a late fee, and possibly a penalty APR.
Grace period: The time between the closing date and the due date. If you pay the full statement balance by the due date, most cards charge no interest on new purchases. If you carry a balance, the grace period is usually lost: purchases earn interest from the day they post until you pay in full again, and you can get "trailing" (residual) interest for the days between the closing date and the day your payment arrives.
Minimum payment: The smallest amount you must pay by the due date to stay in good standing. Paying only the minimum keeps most of the balance on the card, so it keeps earning interest.

The formula

Interest for the cycle = average daily balance × (APR ÷ 365) × days in the cycle.

This page adds interest once, on the closing date. Many issuers actually compound daily (each day's interest is added to the balance). That usually changes the result by only a few cents a month. Cash advances and balance transfers usually have no grace period and are not modeled here.

Educational only. Not financial advice. Real issuers vary; your cardholder agreement governs.