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Average Daily Balance Calculator

Calculate a credit card’s average daily balance for a billing cycle from the starting balance, purchases and payments by day, then the interest charged with the daily periodic rate.

Days in the billing cycle

Balance at the start of the cycle

Purchase APR

Transaction 1: day of the cycle

Transaction 1: amount (+ purchase, − payment)

Transaction 2: day of the cycle

Transaction 2: amount (+ purchase, − payment)

Transaction 3: day of the cycle

Transaction 3: amount (+ purchase, − payment)

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How it works

Average daily balance = Σ (balance at the end of each day) ÷ days in the cycle · daily periodic rate = APR ÷ 365 · interest = average daily balance × daily rate × days in the cycle

Most card issuers compute interest with the average daily balance method: they record the balance at the end of every day of the billing cycle, average those balances and apply the daily periodic rate for each day. A payment made early in the cycle lowers more days’ balances and therefore cuts interest more than the same payment made just before the due date. This calculator assumes you are carrying a balance (no grace period this cycle) and posts each transaction at the start of its day.

Worked example

A 30-day cycle starts with a 1,000 balance, a 500 purchase posts on day 10 and a 300 payment on day 20. The balance is 1,000 for 9 days, 1,500 for 10 days and 1,200 for 11 days, so the average daily balance is (9,000 + 15,000 + 13,200) ÷ 30 = 1,240.00. At 24% APR the daily rate is 0.0658%, and the interest is 1,240 × 0.0658% × 30 = 24.46.

Sources: Investopedia — Average daily balance method · CFPB — Credit cards

Frequently asked questions

Does paying earlier in the cycle really reduce interest?

Yes. Each day the lower balance counts toward the average, so a payment on day 5 saves roughly five times as much interest as the same payment on day 25.

Do I pay interest if I pay the statement in full?

Normally not: with a grace period, new purchases are interest-free when the previous statement was paid in full. The average-daily-balance interest applies when you carry a balance.

Are new purchases included?

Under the most common method (“including new transactions”) yes, from the day they post. Some issuers exclude them; check the cardholder agreement.

Is the daily rate APR ÷ 365 or ÷ 360?

Most issuers divide by 365; some use 360, which makes the effective rate slightly higher.

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How many interest-free days do you get on a credit card purchase? Enter the statement closing day and the days until the due date to find the payment due date, the best day to buy and the maximum grace period.

Estimates for education and planning, not financial advice. Lenders’ contracts, fees, day-count and rounding rules differ — check the official cost disclosure (APR / TAE / CAT) in your loan or card agreement before deciding.