How credit card interest works

The answer

Paying $200.00 a month on a $6,000.00 balance at 22.99% takes 3 yr 10 mo — around Jul 2030 — and costs $3,011.78 in interest.

Of the first $200.00, $114.95 is interest and $85.05 comes off what you owe.

Total interest
$3,011.78
Total paid
$9,011.78

An estimate from the inputs shown, not a promise of a particular date. How we calculate this.

An APR is an annual rate; card interest is generally charged monthly against the balance you carry. The answer above works that out for the card in the fields below.

If you pay your statement balance in full each cycle, a grace period usually means you are charged no interest on purchases at all. Interest becomes a real cost the moment you start carrying a balance from month to month.

What it costs you

Purchases only, at a single rate. Cash advances and balance transfers are commonly charged at different rates and often have no grace period.

Estimated result

3 yr 10 mo

Estimated debt-free date Jul 2030

Total interest

$3,011.78

Total paid

$9,011.78

Assumptions

  • Interest accrues once a month, before that month's payment.
  • The APR stays at 22.99% for the whole term.
  • No new spending, fees, penalty rate or promotional rate.
  • You pay the payment above in full, on time, every month.
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APR, per month

A monthly interest charge is roughly the balance multiplied by the monthly share of the APR. Issuers usually compute it against an average daily balance rather than a single snapshot, so your statement may differ slightly from a flat monthly model such as this. The difference is small; the direction is not.

The grace period, and when it disappears

Pay the statement balance in full and most cards charge no interest on new purchases. Carry a balance and that protection typically lapses, so new purchases can start accruing immediately. This is why 'I will just pay it down slowly' quietly costs more than people expect.

Not every rate on the card is the same rate

Cash advances, balance transfers and purchases frequently carry different APRs, and a penalty rate can apply after a missed payment. A single-rate calculator — including this — models the balance you tell it about, at the rate you tell it, and nothing else.

Sources

  1. Consumer Financial Protection Bureau — How does my credit card company calculate the amount of interest I owe? (tier 1)
  2. Consumer Financial Protection Bureau — What is a grace period for a credit card? (tier 1)

Our source and corrections policy explains how these are chosen.

Related

Reviewed 2026-09-17. Every figure on this page is produced by the same payoff engine the Dang! Payoff app runs, from the inputs shown, and is an estimate that holds only if the stated assumptions hold. The dates printed here were computed from a plan starting September 2026; the calculator re-anchors to the current month in your browser, so a date you read with JavaScript disabled is the one for that starting month rather than for today.

Dang! Payoff is a manual-entry debt payoff planner and tracker from Dang Apps LLC. It is not a lender, credit counselling agency, debt-relief, debt-management or debt-settlement service, and nothing here is financial, legal or tax advice or a recommendation about your situation. Your issuer’s or lender’s own terms govern your account.

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