Finance charge calculator

The same math applies whether you label the balance as carried unpaid balance or average daily balance (ADB)—you enter the figure your method requires. Carried balance fits problems that give one unpaid balance for the cycle; ADB fits when the prompt or statement already shows an average.

365 vs 360 day basis: Most US card examples use 365 days in the denominator (APR ÷ 365). Some commercial loans and textbook problems use 360—a higher daily rate for the same APR. Open Advanced in the calculator to switch; the finance charge is slightly higher on a 360-day basis because each “day” of interest is larger.

If you want monthly interest on a card, you are usually modeling one statement cycle (often 28–31 days)—not a full loan amortization. The estimate is typically balance × daily periodic rate × days in that cycle, not APR ÷ 12 on a flat balance unless your assignment uses that shortcut.

How much should a finance charge be? There is no universal “right” number—it depends on balance, APR, days in the cycle, and your issuer’s balance method. Two worked examples on this page: $14.79 on $1,000 at 18% APR for 30 days (textbook preset) and $66.55 on $3,000 at 26.99% APR for 30 days (high-APR preset). Compare your result to the interest charged line on your statement.

For past-due or invoice interest over a custom day count, use Custom days mode. For installment loans, use our auto loan calculator—car and personal loans use amortization, not this one-cycle pattern.

Average daily balance (ADB) is a common way issuers compute interest: add each day’s balance across the billing cycle, divide by the number of days, and charge interest on that average—not necessarily on the balance shown on your statement closing date alone.

Mini example (how ADB is built): Suppose a 3-day cycle with daily balances $100, $150, and $200. Sum = $450; ADB = $450 ÷ 3 = $150. Finance charge for the full cycle would use $150 in the daily-rate formula (with your APR and total cycle days)—not $200 closing balance alone.

This calculator does not build ADB from daily purchases and payments. When you already have the ADB from your statement or a class problem, select Average daily balance and enter that number—the daily-rate formula is the same as for a carried balance.

Example preset: ADB $1,322.58, 9.9% APR, 31 days, 365-day year → finance charge about $11.12. For rate moves in basis points, use our basis points calculator.

To line up an estimate with a real card, pull three numbers from your statement or card agreement:

• APR — purchase APR for the balance you are modeling (cash-advance and penalty APRs may differ)
• Balance subject to interest — sometimes labeled average daily balance, interest charge calculation, or balance for interest; use the basis that matches your agreement
• Days in billing cycle — often 28–31; may appear near the statement period dates

Grace period: If you paid the previous statement balance in full by the due date, many issuers charge no purchase interest on new charges until the next cycle—so your finance charge may be $0 even with activity. This calculator does not know your payment history; enter a balance only when you are modeling interest on an amount that is actually subject to APR.

Compare the calculator’s finance charge to the interest charged or finance charge line. Small differences often come from rounding, ADB you cannot see without a daily ledger, or fees outside interest.

Card agreements describe how the issuer sets the balance used for interest. Labels vary, but common methods include:

• Average daily balance — interest on the mean balance each day of the cycle; choose Average daily balance here when you already have the ADB figure
• Daily balance — interest on each day’s balance (similar daily-rate math; you may still enter an average or carried figure from your statement)
• Adjusted balance — balance after payments/credits, sometimes with timing rules; not modeled—use the balance your disclosure specifies
• Previous balance — interest on the balance at the start of the cycle (less common today)
• Two-cycle balance — historical method; rare on new accounts

Fees (late, cash advance, foreign transaction) may appear on your statement separately from interest. Promotional 0% APR windows can zero out purchase interest until they end. This tool models interest on a single balance figure for one period only—not every fee line on a Regulation Z disclosure.

Regulatory context: see CFPB — what is a finance charge and FTC — using credit.

Revolving credit (credit cards) usually charges interest on the balance you carry each day of the cycle using a daily periodic rate derived from APR. New purchases may get a grace period if you paid the previous statement in full—rules differ by issuer.

Installment loans (auto, personal, mortgage) quote APR on an amortizing schedule: each payment splits principal and interest over the term. A loan finance charge in the Truth in Lending sense is total dollar cost of credit over the life of the loan—not “balance × daily rate × 30 days” on the original principal.

• Credit card (this tool) — one billing period; daily rate × balance figure × days
• Auto / personal loan — monthly payment; declining interest portion; use amortization tools
• Mortgage — long-term amortization; upfront finance charges may include points and fees separate from interest accrual

Use this page for one-cycle card-style estimates. For auto payments and total loan interest, try our auto loan calculator and amortization schedule calculator. To compare savings-style yields, see the APY calculator.

Finance charges grow with higher balance, higher APR, and more days in the cycle. Practical ways to reduce them:

• Pay the statement balance in full before the due date when you can—many cards waive interest on purchases when the prior cycle was paid in full.
• Pay early and often — lowering daily balances reduces ADB and daily-balance interest.
• Reduce APR — balance transfer offers, issuer negotiation, or improved credit may lower the rate (confirm fees and revert rates).
• Avoid cash advances — they often start interest immediately with separate APRs and fees.
• Plan payoff — model months to zero with our debt payoff calculator.

Paying only the minimum payment usually leaves a balance that accrues interest next cycle—the minimum satisfies contract terms but rarely stops finance charges on the remaining balance.

Put balance in A1, APR (%) in B1, days in C1, and day basis (365 or 360) in D1:

=A1*(B1/100)/D1*C1

Daily finance charge only (same cells):

=A1*(B1/100)/D1

Google Sheets uses the same syntax. For multi-month card payoff—not one cycle—build a ledger or use our debt payoff calculator. You can also run the live tool and export CSV instead of building the sheet yourself.

When your question goes beyond a single statement cycle, try these related calculators:

• Credit card interest calculator — statement-cycle interest with an average daily balance ledger
• Debt payoff calculator — avalanche/snowball plans across multiple balances
• Simple interest calculator — I = Prt for flat-rate principal/time problems
• APY calculator — annual percentage yield on savings
• Auto loan calculator — monthly payment and total interest on installment loans
• Amortization schedule calculator — principal vs interest by period
• Basis points calculator — bps ↔ percent on quoted rates

This finance charge calculator is for learning and illustration. Results are interest-only estimates for one balance period using the daily-rate method you choose. Real finance charges can include:

• Late, returned-payment, annual, or cash-advance fees
• Penalty APR after missed payments
• Promotional or deferred-interest plans
• Grace periods on purchases when the prior balance was paid in full
• Issuer-specific balance methods and rounding

CSV/PDF export repeats the same illustrative math—it is not a loan estimate or credit offer. Ordio does not see your card data; everything runs in your browser.

Not tax, legal, or lending advice. Confirm numbers on your card agreement and monthly statement before making payment or credit decisions.