 TITLE: Is Credit Card Interest Compounded Daily? CONTENT: In most cases, credit card interest is compounded daily using a daily interest rate and an average daily balance.\nCalculating the amount of interest you owe in a month can be complex. First, divide your credit card's APR by 365 to find your daily interest rate. Then find your average daily balance by adding any outstanding balance from the previous month to each day's balance for the ensuing month. You'll have to determine your total balance each day on your own by closely combing through your credit card statement. Divide the total by the number of days in the month.\nMultiply your average daily balance by your daily interest rate.\nIn our example, let's say your average daily average credit card balance was $500 and your APR is 17%. Multiplying 500 by 0.00047% gives you 0.233. You'd then multiply that by the number of days in your statement period. For a 30-day period, 30 multiplied by 0.233 gives you $6.99. That's the amount of interest you'll owe for the month. You can use Experian's Credit Card Payoff Calculator to better understand how interest can affect your credit card balances.\nIt's important to note that for credit cards, APR and interest rate mean the same thing. That may not be true for installment loans like student loans and mortgages, though, since the APR will generally also take into account any origination or other fees charged by the lender. END