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Calculate your credit card interest and see how long it will take to pay off your balance with our easy-to-use calculator. Plan smarter, avoid interest, and manage your debt effectively.
If you pay your balance in full every month, you can avoid paying credit card interest while enjoying the rewards and benefits that come with your credit card. But if you carry a balance on your credit card, your card issuer will charge somewhere between 12% and 21%, on average, depending on the card.
Play around with our credit card interest calculator to calculate credit card interest and figure out how long it will take you to repay the debt. This tool can help you develop a plan to address your balance and avoid paying interest going forward.
Our credit card interest calculator can help you figure out two key pieces of information:
Start by inputting your credit card balance and your card’s annual percentage rate (APR). If you don’t know this number, log into your credit card account and pull up your card’s terms and conditions.
Next, decide if you want to see how much total interest you’ll pay based on your current monthly payment (and enter that amount) or specify your payoff goal in months to see how the total interest charges.
Since interest is expressed as an annual percentage rate, card issuers take several steps to determine how much to charge each month. Here’s how you can figure out their method:
If you have a credit card with a $1,000 balance and 20% APR, your daily interest rate would be 0.0548%. Assuming you don’t add to the debt, you’ll be charged around $0.55 in interest every day. If there are 30 days in the billing cycle, you’ll pay $16.50 in interest for the month.
When you get a credit card statement each month, you’ll see a minimum payment amount listed. This is often a flat rate or a small percentage of your balance (usually 3%), whichever is higher.
While it’s tempting to just pay the minimum payment your credit card issuer asks for, doing so guarantees you’ll be charged interest because you’ll be carrying a balance into the following month.
Instead, make a point of paying off your balance in full every month. Not only will you avoid paying credit card interest, but your card issuer will report these payments to the credit monitoring bureaus, which can boost your credit score. Plus, the cash back or rewards you earn with the card won’t be offset by the interest you’re charged, so you truly get more out of using your card.
If you already have a credit card balance, don’t despair. There are strategic things you can do to get out from under credit card debt.
As a first step, call your bank or credit card provider to request a lower interest rate. Your card issuer may be willing to work with you, so don’t hesitate to ask. They might agree to lower your rate, offer to switch you to a lower-interest card, or create a repayment plan that works for your situation—but you’ll never know if you don’t ask.
It’s important to honestly track your income and expenses so you can trim unnecessary costs. Stop charging purchases to your credit cards and switch to cash or debit, instead.
While it might seem difficult, try to contribute to an emergency savings fund. If an unexpected expense comes up (like an appliance repair or vet bill), you can pull from your fund rather than charge it to your credit card.
If you have significant debt, find a balance transfer credit card with a great promotional rate. Then, move your existing balance to the card. You can quickly pay down the balance while you’re not being charged interest. The golden rule of balance transfer cards: never charge new purchases to the card.
There are two main approaches to paying off debt:
It’s completely understandable to feel overwhelmed by your credit card debt, which is why a credit counsellor can be so helpful. Speak to representatives from your financial institution, a credit counselling agency, or a debt consolidation program to discuss your options. They can help you create a tailored plan to resolve the situation.
If you’re juggling multiple loans and credit card balances and having trouble paying them off, it may make sense to consolidate your debt. This means combining two or more debts into one, with just one payment to make each month.
Another option is a debt consolidation loan from a bank or other financial institution. Or you could work with a credit counselling agency to negotiate a debt consolidation program (DCP) or consumer proposal (repaying only part of your debt) with your lenders.
Learn more about each of these options by reading “How to consolidate debt in Canada” and “Who should Canadians consult for debt advice?”
To find out how much interest you’re charged each day, divide your APR by 365. Then, multiply the result by the number of days in the billing cycle. This shows you how much interest you’re charged that month.
The average credit card interest rate is around 20%, so 29.99% is considerably higher than average. You might be charged a higher rate if your credit score is low or if you miss payments on a regular basis.
A credit score of 800 is excellent, so you should be able to secure a credit card with a low APR. Shop around for cards with low advertised interest rates—but at the end of the day, do your best not to carry a balance at all. If you don’t carry debt on your credit card, the APR won’t matter!
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