This means that your interest is added to your principal original balance at the end of. Daily compounding means that the credit card company calculates the interest you owe daily and adds that to the balance of the card. The amount of your next payment that will be applied to principal The amount of your next payment that will be applied to interest.
Using a credit card for cash comes with a higher interest rate than using a card for purchases.
Convert your APR to a daily rate The majority of credit card issuers compound interest on a daily basis. Calculating Credit Card Interest 1 Calculate the monthly interest amount. Daily compound interest is calculated using a simplified version of the compound interest formula. In order to calculate the monthly interest charges to your balance you simply need to multiply this daily periodic rate by the number of days in your billing cycle.