How to Calculate APR on a Credit Card (Aug. 2024)

Banks are notorious for making numbers complicated. Even something as seemingly simple as your credit card’s annual percentage rate (APR) becomes complex when trying to calculate how banks get that number. But not to fear — learning how to calculate APR on a credit card is possible, and we’ll show you how.

As a responsible consumer, you’re rightfully concerned as to how this perplexing number determines what you’re paying in interest charges. We’ve broken it all down for you as simply as possible and will show you:

1. Three simple steps for calculating your APR
2. How to pay no interest at all with a balance transfer
3. The best balance transfer cards available today

We’ll take you through step by step and explain the hows and whys of each. Let’s get started with calculating your APR.

It’s actually quite easy once you know the equation, which we’ll explain here.

1. Find Your Average Daily Periodic Rate

Your Average Daily Periodic Rate can be found at the bottom of your monthly statement. We’ll call it ADPR. This number will be very low and may not seem like much, but this is what you are being charged in interest on average daily. We’ll touch more on this in step 2, but for this calculation, we’ll assume it’s .04654.

2. Multiply ADPR By 365

Take the ADPR (.04654) and multiply it by 365, the number of days in a year. You use the number of days in a year because your interest compounds daily. Your ADPR represents what you are charged each day and is determined by your outstanding balance. Banks use the average balance over the entire billing cycle.

(.04654)(365) = 16.987

Note: Some credit card issuers use 360 instead of 365, according to the CFPB.

3. View Your APR

Round that number up to get 16.99% — your APR. The calculation is:

(ADPR)(365) = APR

If you’ve done the math and aren’t happy with what you see, there’s a way to stop paying interest for a while. It’s called a 0-percent intro APR, and some cards offer them for up to 18 months.

This works by applying for a new card and transferring your current balance to the new card. You’ll receive up to 18 months of an interest-free balance AND most cards even offer 0 percent interest on purchases. This means everything charged to the new card will also be interest free for a while, depending on your agreement.

Our experts are always looking for the best balance transfer cards, as they’re such a popular option among consumers today who are sick of paying sky-high interest rates. Granted, many factors determine the interest you’re being charged, but if you have good credit, you’ll likely qualify for one of these cards.

Below are a few of our experts’ top picks, but to see the full list, visit our balance transfer review page.

Citi® Diamond Preferred® Card

at Citi'ssecure website

0% BALANCE TRANSFER RATING

★★★★★

4.8

Citi® Diamond Preferred® Card

4.8/5.0

About this rating

Our in-house credit card experts rate balance transfer offers based on:

• The promotional rate duration
• The ongoing regular APR
• Annual and other fees
• Rewards offered
• General approval rates

We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.

See Our Review»

Ashley Fricker Senior Editor

Close

OVERALL RATING

4.5/5.0

Citi® Diamond Preferred® Card

4.5/5.0

About this rating

Our in-house credit card experts rate balance transfer offers based on:

• The promotional rate duration
• The ongoing regular APR
• Annual and other fees
• Rewards offered
• General approval rates

We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.

See Our Review»

Ashley Fricker Senior Editor

Close

Our Review »

• 0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 18.24% - 28.99%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
• There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
• Get free access to your FICO® Score online.
• With Citi Entertainment®, get special access to purchase tickets to thousands of events, including concerts, sporting events, dining experiences and more.
• No Annual Fee - our low intro rates and all the benefits don't come with a yearly charge.

• See application, terms and details.

See Rates & Fees

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
0% 12 months on Purchases	0% 21 months on Balance Transfers	18.24% - 28.99% (Variable)	$0	Good/Excellent

Additional Disclosure: Citi is a CardRates advertiser.

Citi Double Cash® Card

at Citi'ssecure website

0% BALANCE TRANSFER RATING

★★★★★

4.8

Citi Double Cash® Card

4.8/5.0

About this rating

Our in-house credit card experts rate balance transfer offers based on:

• The promotional rate duration
• The ongoing regular APR
• Annual and other fees
• Rewards offered
• General approval rates

We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.

See Our Review»

Ashley Fricker Senior Editor

Close

OVERALL RATING

4.8/5.0

Citi Double Cash® Card

4.8/5.0

About this rating

Our in-house credit card experts rate balance transfer offers based on:

• The promotional rate duration
• The ongoing regular APR
• Annual and other fees
• Rewards offered
• General approval rates

We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.

See Our Review»

Ashley Fricker Senior Editor

Close

Our Review »

• Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
• Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
• Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 19.24% - 29.24%, based on your creditworthiness.
• Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
• If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
• There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

• See application, terms and details.

See Rates & Fees

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
N/A	0% 18 months on Balance Transfers	19.24% - 29.24% (Variable)	$0	Excellent/Good/Fair

Additional Disclosure: Citi is a CardRates advertiser.

Discover it® Chrome

at Discover Card'ssecure website

0% BALANCE TRANSFER RATING

★★★★★

4.8

Discover it® Chrome

4.8/5.0

About this rating

Our in-house credit card experts rate balance transfer offers based on:

• The promotional rate duration
• The ongoing regular APR
• Annual and other fees
• Rewards offered
• General approval rates

We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.

See Our Review»

Ashley Fricker Senior Editor

Close

OVERALL RATING

4.8/5.0

Discover it® Chrome

4.8/5.0

About this rating

Our in-house credit card experts rate balance transfer offers based on:

• The promotional rate duration
• The ongoing regular APR
• Annual and other fees
• Rewards offered
• General approval rates

We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.

See Our Review»

Ashley Fricker Senior Editor

Close

Our Review »

• INTRO OFFER: Unlimited Cashback Match for all new cardmembers–only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
• Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
• Get a 0% intro APR for 18 months on balance transfers. Then 18.24% to 28.24% Standard Variable APR applies, based on credit worthiness.
• Redeem your rewards for cash at any time.
• Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
• No annual fee.
• Terms and conditions apply.

• See application, terms and details.

See Rates & Fees

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
0% Intro APR for 6 months	0% Intro APR for 18 months	18.24% - 28.24% Variable APR	$0	Excellent/Good

By understanding your APR, you’ll be able to comprehend how interest is calculated and tacked on to your monthly bill. This should prompt you to pay your balance off every month because those interest fees can have a considerable impact on budgets. But if you carry a balance, hopefully by now you’ve decided you’re not going to settle for paying high interest (or any interest!) any longer and are ready to transfer that balance to a 0% intro APR card that will treat you better. Also, don’t forget how important it is to make your payments on time every month — having a history of on-time payments is the most important factor used when calculating your credit score.