Credit Card Interest Calculator
If you borrow money using a credit card, you’ll be charged interest on any unpaid balance at the end of each billing cycle.
Let NerdWallet Canada’s credit card interest calculator run the numbers, or use the guidance below to calculate your credit card interest by hand.
How do I calculate credit card interest?
You can calculate your credit card interest in four steps.
What is an average credit card interest rate?
Most Canadian credit cards charge about 20% interest on purchases. Some low-rate credit cards offer purchase interest rates closer to 10%, but these are less common.
Other cards may offer interest rates as low as 0% for a promotional period. After the promotional period ends, the card reverts to a higher rate.
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Compare the best cards side-by-side to find one that meets your needs with special perks and benefits.
How can I avoid interest on my credit card?
Credit card interest can be avoided by always paying your bill in full. Interest-free grace periods of 21 days are standard and typically start at the end of your billing period. You won't be charged credit card interest if you pay your credit card balance in full before your card’s grace period is up.
If you can't afford to pay your credit card balance in full, making smaller, more frequent payments throughout the month will shrink your average daily balance and reduce the amount of interest you owe.
Frequently asked questions
Is credit card interest calculated daily or monthly?
Is credit card interest calculated daily or monthly?
Interest on unpaid credit card balances is typically calculated daily and charged monthly.
What does 20% interest on a credit card mean?
What does 20% interest on a credit card mean?
If your credit card has an interest rate of 20%, that 20% rate is divided by 365 days and multiplied by your average daily balance to determine how much interest you owe on an unpaid balance.
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Shannon Terrell
Shannon Terrell
Shannon Terrell