💰 Finance Charge Calculator
Calculate finance charges on credit accounts
Period to calculate finance charge for (typically 30 days)
How to Use This Calculator
Enter Account Balance
Input the outstanding balance on your credit account - the amount on which finance charges will be calculated.
Enter APR
Enter the Annual Percentage Rate (APR) for your account. This is the interest rate used to calculate finance charges.
Enter Number of Days
Enter the number of days to calculate the finance charge for. Typically 30 days for monthly statements, or enter any period.
Review Finance Charge
See the finance charge for the specified period, along with daily, monthly, and annual finance charges. This helps you understand the cost of carrying a balance.
Formula
Daily Periodic Rate = APR ÷ 365
Finance Charge = Balance × Daily Rate × Number of Days
Example Calculation:
If balance is $5,000, APR 18%, for 30 days:
• Daily rate = 18% ÷ 365 = 0.0493%
• Daily charge = $5,000 × 0.000493 = $2.47/day
• Finance charge (30 days) = $5,000 × 0.000493 × 30 = $73.97
• Monthly charge: $73.97
• Annual charge: $5,000 × 18% = $900
About Finance Charge Calculator
A finance charge calculator helps you calculate the cost of borrowing money on credit accounts, such as credit cards, store credit, or other revolving credit accounts. Finance charges are the fees and interest charged for using credit. They're typically calculated daily based on your account balance and Annual Percentage Rate (APR), then added to your account monthly. Understanding finance charges helps you understand the true cost of carrying a balance and can motivate you to pay off debt faster.
When to Use This Calculator
- Credit Card Statements: Understand finance charges on credit card statements
- Cost Awareness: Understand the cost of carrying a balance
- Payment Planning: Plan payments to minimize finance charges
- Debt Management: Understand true cost of debt
Understanding Finance Charges
- Definition: Cost of borrowing money on credit accounts
- Calculation: Based on balance, APR, and time period
- Daily Calculation: Interest accrues daily on outstanding balances
- Monthly Billing: Finance charges added to account monthly
- Avoiding Charges: Pay balance in full by due date to avoid charges
Why Use Our Calculator?
- ✅ Quick Calculation: Instantly see finance charges
- ✅ Multiple Timeframes: Calculate for any number of days
- ✅ Daily/Monthly/Annual: See charges at all timeframes
- ✅ Cost Awareness: Understand true cost of carrying balance
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is a finance charge?
A finance charge is the cost of borrowing money, including interest and fees. For credit cards, it's the interest charged on outstanding balances. Finance charges are calculated daily based on your balance and APR, then added to your account monthly.
How can I avoid finance charges?
To avoid finance charges on credit cards, pay your balance in full by the due date each month. This takes advantage of the grace period. If you carry a balance, finance charges will apply. Some accounts may also charge fees that are separate from interest.
How are finance charges calculated?
Finance charges are calculated using a daily periodic rate (APR ÷ 365) applied to your average daily balance. The charge = Balance × Daily Rate × Number of Days. Most credit cards use the average daily balance method, calculating interest on your average daily balance over the billing cycle.
Do finance charges apply to all transactions?
Finance charges typically apply to outstanding balances. If you pay your balance in full by the due date, you usually avoid finance charges due to the grace period. However, cash advances often start accruing interest immediately with no grace period.