3 Quick Steps to Calculate Credit Card Interest in Excel

In this article, I’ll show you three excellent methods for how to calculate credit card interest in Excel. Furthermore, these strategies will allow you to solve the problem that brought you here. However, you will learn some important Excel features and functions in this post that will come in handy for any Excel task.

How to Calculate Credit Card Interest in Excel

📁 Download Excel File

The sample worksheet that was used during the discussion is available to download for free right here.

How is Credit Card Interest Calculated?

If you want to keep your credit card debt under control, you need to know how the Annual Percentage Rate (APR) is computed and adjusted to your outstanding accounts. annual percentage rate (APR) denotes monthly interest charges for a credit card balance.  Compound interest affects Credit card interest rates. If we break it down to a daily periodic rate, we can get a clearer picture. Your annual percentage rate (APR) may be presented on your monthly statement annually or monthly, but you can easily convert it to a monthly APR yourself. Knowing how much it costs you every day to lend from your credit card lender and which cards you may wish to prioritize paying down quickly might help you make better financial decisions. The annual percentage rate (APR) is a useful tool for determining the true cost of a credit card bill if you don’t pay off the whole balance each month.

Learn to Calculate Credit Card Interest in Excel with These 3 Steps

Here in this article, we will learn how to calculate credit card interest in Excel using different approaches. To be exact, I’ve provided a total of 3 methods down below.

We considered a dataset containing credit card information like interest rate, initial balance, and minimum payment of two credit cards of City Bank.

Dataset for calculating credit card interest in Excel


Step 1: Find Total Monthly Interest

At first, we will calculate the Monthly interest rate using the following formula:

Formula for calculating monthly interest

⬇️⬇️ STEPS ⬇️⬇️

  • Go to cell C8.
  • We will calculate monthly interest by inserting the following formula:


Inserting formula fro calculating monthly interest rate

  • Now press Enter and drag the fill handle to the right.

Results for Monthly Interest rate

Thus, you can get the monthly interest.

📕 Read More: 4 Approaches to Calculate Home Loan Interest in Excel


Step 2: Calculating New Balance

In this step we will use the following formula to calculate the New Balance:

New Balance = Initial Balance + Monthly Interest Amount – Minimum Payment

⬇️⬇️ STEPS ⬇️⬇️

  • Select cell C10.
  • Insert the following formula to get the New Balance:


Inserting formula for Calculating New Balance

  • Finally hit Enter and drag the fill handle to the right.

Results for Calculating New Balance

Hence you will get a New Balance.

📕 Read More: 2 Approaches to Calculate Interest Between Two Dates in Excel


Step 3: Calculate Total Payment

Finally in this step, we simply add all the individual new balances of consumers’ credit cards using the SUM function.

⬇️⬇️ STEPS ⬇️⬇️

  • Select cell C11.
  • Write down the following formula:


  • Click Enter to see the result.

Using the SUM function for calculating Total payment

Accordingly, you can calculate your total payment on a credit card.

📕 Read More: 3 Ways to Calculate Accrued Interest on Fixed Deposit in Excel

How to Calculate the Minimum Credit Card Payment?

Your credit card company may set your minimum payment as a percentage of your debt (2% to 5%) or a fixed dollar amount (like $15.00), but it’s more likely to be the former. The interest rate plus a predetermined proportion of the outstanding balance could also be used to determine the minimum payment due. Find out how your credit card issuer defines your minimum payment by reading the fine print of your agreement.


This is the lowest amount you can pay each month to keep your balance from rising. But if you only make the minimum monthly interest payment, you will never be able to pay off your credit card balance. To determine your interest-only payment amount each month, you can use the following formula: Obtain the current balance by multiplying the annual rate by 12 months.

For example, if your annual percentage rate was 12%, the rate you would pay monthly would be around 12% / 12 = 1%.

Calculate the Minimum Credit Card Payment

Percentage of Equity

Revolving credit lines, such as those extended by credit cards, don’t have set repayment terms like fixed-rate loans to do. To ensure that each payment fully covers interest and a portion of the principal, we set the minimum payment percentage higher than the monthly interest rate. This figure typically ranges from 5–15 percent.

Calculate the Minimum Credit Card Payment

Comprised of Interest and a Percentage of the Balance

In the case of credit cards with variable interest rates, the minimum payment may be stated as “X% of the balance + interest.” By setting the minimum payment in this way, you may rest assured that your monthly credit card payment will always be sufficient to pay off the minimum interest and X% of the principal. To make a minimum payment of X% of the balance, use the credit card payment calculator and select the “Plus Interest” option.

Constant Monetary Value

You could theoretically never pay off the balance if the “Percent of Balance” computations set the minimum payment to an amount so low that you’ll never be able to cover the interest. This means that there is typically a set minimum payment requirement, around $105.00. Enter $105.00 into the “Min Payment for Low Balance” area of the credit card calculator.

To Be Paid Back With No Interest During the Grace Period

If you sign up for a new credit card from some issuers, you may be eligible for a promotional period during which interest will not be charged. After the initial term of 0% interest, the standard high rate will take effect. You can use this updated spreadsheet to model that situation, but keep in mind that failure to make an initial payment will result in immediate termination of the promotional period.

📄 Important Notes

🖊️  Verify that you’ve employed Absolute Reference when it was required. To get an absolute cell reference, press F4.

🖊️  Always look for ways that are easy to use in different situations.

🖊️  Every time you try to use shortcuts on the keyboard.

📝 Takeaways from This Article

📌  You can calculate credit card interest in Excel.

📌 Moreover, You can calculate the minimum payment of a credit card.


First and foremost, I hope you were able to apply the principles I taught in this Excel lesson on how to calculate credit card interest in Excel. As you can see, there are numerous ways to accomplish this. However, choose the strategy that is best suited to your situation with care. Most essential, if you become confused in any of the processes, I recommend repeating them. After reviewing the Excel file in the practice workbook I shared above, practice on your own since practice makes perfect. Above all, I sincerely hope you can put it to good use. Please share your thoughts in the comments section about how you felt throughout the article and what we should change or add to make things better for you. However, if you have any Excel-related issues, please leave them in the comments section. The Excelden team is available to answer your inquiries at any time. Finally, keep reading to educate yourself. Please visit our website Excelden.com for further Excel-related articles.

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Md Shamse Tabrej

Md Shamse Tabrej

Hi, I'm Shamse Tabrej. I'm an admirer of Excel who enjoys sharing and solving problems in Excel. I make an effort to investigate all of the choices so that I may point readers toward the most viable solutions. Both the globe and its problems are boundless. Let's assist one another in developing. Reader questions and suggestions are most welcome. 

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