# How to Calculate Average Daily Balance

The average daily balance (or daily average balance) is calculated by adding the ending balances of each day for a defined number of days (usually 30 days for credit card calculations) and dividing it by that total number of days.

For example:

• Ending balance for Day 1: \$1000.00
• Ending balance for Day 15: \$2000.00 (because you bought some things worth \$1000 on this day)
• Ending balance for Day 20: \$1500.00 (because you paid off \$500 on this day)

The above example would really look like this:

DayBalance
1\$1000.00
2\$1000.00
3\$1000.00
4\$1000.00
5\$1000.00
6\$1000.00
7\$1000.00
8\$1000.00
9\$1000.00
10\$1000.00
11\$1000.00
12\$1000.00
13\$1000.00
14\$1000.00
15\$2000.00
16\$2000.00
17\$2000.00
18\$2000.00
19\$2000.00
20\$1500.00
21\$1500.00
22\$1500.00
23\$1500.00
24\$1500.00
25\$1500.00
26\$1500.00
27\$1500.00
28\$1500.00
29\$1500.00
30\$1500.00
Total\$40,500.00

Now divide the total (\$40,500.00) by the total number of days (30) and you get an average daily balance of \$1,350.00 which is what your credit card company will calculate your credit card interest against.

To make your life easier, I have created an average daily balance calculator.