How does credit card interest work?

Credit card interest is the cost charged by the bank if you do not pay your total statement balance by the due date. It is calculated using the Annual Percentage Rate (APR) on your outstanding balance.

• Daily Interest: Your APR is divided by 365 to find the daily periodic rate, which is applied to your average daily balance.
• Grace Period: Most cards offer an interest-free period for purchases if the previous bill was paid in full.
• Cash Advances: Interest usually accrues immediately on cash withdrawals without a grace period.