Credit Card Interest Calculator

Interest owed and payoff time on a revolving credit card balance.

Overview

Computes compound finance charges, APR fees, and multi-year debt payoff schedules on revolving unpaid credit card balances.

Formula & Calculation Method

Monthly Interest = (Outstanding Balance × Monthly APR) / 365 × Number of Days

Credit card APRs range from 36% to 45% per annum (3% to 3.75% per month) plus 18% GST on all interest charges.

Worked Example: ₹50,000 Revolved Balance at 42% APR for 30 Days

Inputs: Outstanding Balance = ₹50,000 | Annual Rate = 42% APR | Billing Period = 30 Days

  • Daily interest rate = 42 / 365 / 100 = 0.0011506
  • Monthly finance charge = ₹50,000 × 0.0011506 × 30 = ₹1,726
  • 18% GST on interest = ₹1,726 × 0.18 = ₹311; Total Monthly Charge = ₹2,037

Summary: Revolving Debt = ₹50,000 | Monthly Interest = ₹1,726 | GST on Interest = ₹311 | Total Cost = ₹2,037/month

Common Use Cases

  • Debt Trap Elimination: See how paying only the minimum amount due balloons total debt over multi-year cycles.
  • Balance Transfer Evaluation: Calculate savings from transferring credit card debt to a low-interest personal loan.
  • Grace Period Understanding: Learn why revolving even ₹1 revokes the 45-day interest-free period on all fresh purchases.

Frequently Asked Questions

What happens if I only pay the Minimum Amount Due?

You avoid late payment penalties, but the remaining 95% balance continues accruing interest at 36%-45% annual APR.

What is the interest-free grace period?

A 20 to 50 day period where no interest is charged, valid ONLY if the previous month's total statement balance was paid in full.

How can I avoid credit card interest entirely?

Always pay 100% of the 'Total Amount Due' on or before the payment due date every single month.

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