How to Calculate the Finance Charge on a Credit Card Balance


You can easily calculate the amount of your next credit card bill. It only requires knowing some key information found on your statement and a calculator to figure the approximate amount of your next bill.

  • Check the current balance owed on your account at the end of the last billing cycle. Determine the interest rate (not the APR) on the credit card.

  • Find out if your interest is calculated over 360 days in a year, or 365, and how long the billing cycle is for your card. This information is usually printed on the back of your credit card statement. If you aren't sure, use 365 days in the year and 30 days in the billing cycle.

  • Divide the interest rate by 365 or 360, whichever is appropriate for your card. The resulting number is the daily interest rate you're paying.

  • Take the daily interest rate and multiply it by the number of days between billing cycles. The answer is the periodic interest rate.

  • Multiply the balance you owed at the end of the last billing cycle by the periodic interest rate that you determined in Step 4. This is the finance charge for your credit card balance for the next cycle.

  • Calculate whether or not your credit card's finance charge based on your average daily balance. If credit charges are based on your average daily balance, complete Steps 1 to 3.

  • Add up the amount that was owed, each day of the previous billing period. Divide this answer by the number of days in the billing period for the approximate amount of your next bill.

Tips & Warnings

  • The total balance for the next cycle may change if you paid anything to your card after the end of the last billing cycle, and if you owe any fees.
  • Some credit card companies don't charge a finance charge for any new purchase made during the last billing cycle. However, others don't charge if you didn't carry a balance from the previous month.
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