Credit Card Interest Rate Calculator
for Calculating Weighted Average APR

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Help you to see the weighted-average annual percentage rate you are paying on all of your card balances combined.

This free online Credit Card Interest Rate Calculator will calculate the weighted average APR for all of your credit cards that have a current balance.

Unlike most credit card interest calculators, this calculator will calculate the current finance charge for each card, and then compute the credit card average APR using a weighted formula.

What is a Weighted Average?

A weighted average takes into consideration how much each card's finance charges represents of the whole -- giving more weight to the interest rates of cards with higher balances.

Suppose you have two cards. The first card has a balance of $5,000 with an annual percentage rate of 18%. The second card has a balance of $1,000 with an annual rate of 12%.

If you use the common method of calculating the average APR (known as the "mean" average), you would simply add the two rates together and divide by two, giving you an average APR of 15% (18% + 12% = 30% ÷ 2 = 15%). However, if you calculate the actual finance charge for the two cards, you will see that the numbers don't add up.

Card Balance APR Current Month
Finance Charge
Card #1 $5,000 18% $75.00
Card #2 $1,000 12% $10.00
Totals $6,000 ? $85.00

If we divide 15% by 12 to get the monthly rate of .0125 (.15 ÷ 12) and multiply the balance by that result, the total finance charge for the two cards would be $75. Obviously, that is not correct.

In order to get the actual average rate, we need to work backwards. First we take the $85 and divide that by the total balance to get a monthly rate of .0142 ($85 ÷ $6,000 = .0142 rounded). Multiplying .0142 by 100 and then by 12 gives us the actual average annual rate of 17% (.0142 * 100 = 1.42 * 12 = 17% rounded).

The reason the actual average is higher than 15% is because the card with the higher balance has more influence (weight) on the average than the card with the lower balance. Hence the term "Weighted Average."

Why is Knowing Average APR Important?

Now that you understand what "weighted average" means, you should now have a clear idea of how to prioritize your efforts to get your interest rates lowered. Since it's the weighted average that determines how much interest you will pay on all of your cards, you will want to focus all of your efforts on lowering the rates of your highest rate, highest balance cards ... because they carry the most weight.

With that, let's use the following credit card interest rate calculator to calculate the credit card average APR for all of your cards that have balances on them.

Calculate Credit Card Average APR
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Instructions: For each credit card you have, enter the name, current balance, and annual interest rate, then click the "Calculate Credit Card Average APR" button.

Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the Credit Card Interest Rate Calculator.

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Entry Columns Calculated Columns
Balance ($)
Rate (%)
Current Month
Interest Cost
% of Interest
Cost Total
Help Totals:
Help Credit card average APR:
Help Monthly cost per 1% of average APR:
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Credit Card Interest Rate Calculator Glossary of Terms

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Card Name entry column: Optional: Enter the name of each credit card if you would like to keep track of which cards you have entered.

Statement Balance entry column: The current principal balance of each credit card. If you have more than fifteen cards, I suggest you combine cards that have similar interest rates. Most card companies charge interest based on the average daily balance and daily compounding. So as not to overstate finance charges, the credit card interest rate calculator simply uses the current balance and monthly compounding to calculate finance charges.

Interest Rate entry column: The annual percentage rate (APR) of each credit card as a percentage (for .06, enter 6%). If a certain card has more than one interest rate (1 for purchases and 1 for cash advances), enter the balances and rates on two separate lines.

Current Month Interest Cost calculated column: Based on your balance and interest rate, this column will show the calculated finance charge for the current month for each entered card. Tab out of changed fields to recalculate.

% of Interest Cost Total calculated column: Based on your balance and interest rate, this column will show the percentage of the total current month interest that each card represents. Tab out of changed fields to recalculate.

Totals row: This row shows the total for each column. Note that the total listed in Interest Rate % column is the mean average of the entered rates.

Credit card average APR: This is the weighted average APR of all of your entered credit cards.

Monthly cost per 1% of average APR: This is how much each 1% of the weighted average apr is costing you. In other words, for each 1% you are able to lower your average APR, this is how much you will save each month if the balances stay the same.

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