1. What is APR Interest?

APR (Annual Percentage Rate) interest is the cost of borrowing money on a credit card, expressed as a yearly rate. Credit card companies typically calculate interest daily based on your average daily balance.

2. How Does the Calculator Work?

The calculator uses the daily APR interest formula:

Where:

• \( balance \) — Your credit card balance
• \( APR \) — Annual Percentage Rate (as a percentage)
• \( days \) — Number of days interest is being calculated for

Explanation: The formula first converts the annual APR to a daily rate by dividing by 365 days, then multiplies by your balance and the number of days.

3. Understanding Credit Card Interest

Details: Credit card interest compounds daily, meaning each day's interest is added to the balance, and the next day's interest is calculated on this new amount. This calculator shows simple interest for a given period without compounding.

4. Using the Calculator

Tips: Enter your current credit card balance, the APR (found on your statement), and the number of days you want to calculate interest for. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this the exact interest I'll be charged?
A: This is an estimate. Actual interest may vary due to compounding, grace periods, or changes in balance.

Q2: How can I avoid paying credit card interest?
A: Pay your balance in full by the due date each month to avoid interest charges.

Q3: Why divide APR by 365?
A: This converts the annual rate to a daily rate since credit card interest is calculated daily.

Q4: What's the difference between APR and interest rate?
A: APR includes both the interest rate and any additional fees, giving a more complete picture of borrowing costs.

Q5: How does compounding affect my interest?
A: With compounding, interest is added to your balance daily, so you pay interest on previous interest charges.