Average Daily Balance Calculator

Average Daily Balance Calculator for Credit Cards

I have received a lot of questions about what the average daily balance is and how it is calculated. To answer the first question, the average daily balance is defined as the average of your balance during the billing cycle. To calculate the credit card average daily balance, you simply take the total balance at the end of each day of the billing cycle, then divide by the number of days.

I figured I’d make it a bit easier for all my visitors and create an online average daily balance calculator, located to the right.

Read my related article: How to Calculate Average Daily Balance

Read another related article: How Credit Card Interest is Calculated

Enter the number of days within your credit card’s billing cycle then enter the balance at the end of each day. The average daily balance will automatically calculate and display.

Days in Billing Cycle
Average Daily Balance $

Your average daily balance (adb) is extremely important to monitor and calculate each month. That is, unless you’re paying off your credit card in full each month. Unfortunately, that’s not the case for the average American.

Once you start carrying a balance, make sure you pay off as much of that amount as early as posslbe. I know, it sounds like a simple concept, but believe me, it’s not understood by most people. By reducing the number of days you hold a certain amount, the more money you save for yourself.

A popular piece of managing credit card balances is to “pay early and buy later”. Here’s a simple math problem to explain what it means:

Assumptions:

  • You have to pay interest immediately after your first purchase
  • Your credit card interest rate is at 5% per month
  • On May 1st your only purchase for the month is an item for $100
  • The end of the billing cycle is May 30th

If you pay off your credit card on May 5th, your daily average balance is $16.67 (($100 x 5) / 30). That means you only pay $0.83 for interest.

BUT if you wait until the last day to pay your credit card on May 30th, then your ADB is $100 (($100 x 30) / 30). That means you pay $5.00 for interest. That’s about six (6) times higher! Or it simply means you could be saving so much more money!

I’ve been there. It caught me off gaurd how much I was losing just by waiting to pay off my credit card balances too. But I’m glad I’m aware and now I hope you are too!