Interest every day
Most credit cards charge interest daily. The daily periodic rate is the APR divided by 365 (some issuers use 360). At 22.15%, that's about 0.0607% a day. On a $2,000 balance, one day of interest is about $1.21. It sounds like nothing, and that's what makes it easy to overlook.
Interest on interest
Each day's interest gets added to the balance, so tomorrow's interest is charged on a slightly bigger number. Over 30 days, $2,000 builds up about $36.73 of interest compounded daily, versus $36.41 with simple interest. The gap is small in a month but grows over time. Compounded daily for a full year, 22.15% works out to about 24.79%.
The card's doubling clock
At that effective rate, an untouched balance would double in about 3.13 years. A full year with no payments on $2,000 adds about $496. Nobody plans to leave a balance untouched for a year; the figure is there to show the math, and the minimum payment rules exist precisely so balances don't just grow. For comparison, the page shows a 7% yearly rate's doubling clock: about 10.2 years.
The grace period
Most cards have a grace period: if you pay the full statement balance by the due date, new purchases usually don't get charged interest at all. Carry any balance past the due date and interest starts accruing, often on new purchases too, until you pay in full again. Cash advances usually don't get a grace period.
How statements really calculate it
Statements typically use the average daily balance method: add up each day's balance in the billing cycle, divide by the number of days, and apply the daily rate for each day. Payments and purchases during the month change the average. This page keeps the balance fixed to show the core mechanics.
Where the APR comes from
The default 22.15% is the Federal Reserve's G.19 average for card accounts assessed interest (Sep 8, 2026 release). Your card's APR is on your statement. The "360 days" option shows how a 360-day basis nudges the numbers up slightly.
Sources
Last reviewed: Sep 28, 2026