While Credit Card is a widely used and convenient financial tool to borrow or lend money from the bank, oftentimes the interest on credit cards could be very high. In this tutorial, I will show you how to calculate credit card interest in Excel to help you reduce or eliminate credit card debt or switch to a credit card with a lower interest rate.
3 Easy Steps to Calculate Credit Card Interest in Excel
To calculate the interest on a credit card we will need to have all the relevant information regarding the credit card. We should know the Current Balance, Minimum Payment Percentage, and Annual Interest Rate for the card. You will find all the information at the top or bottom of the latest credit card statement that the bank sent to you.
Step 1: Calculate Monthly Interest Amount to Find Out Credit Card Interest
- First, we will calculate the monthly interest amount for the initial balance we have right now. We will write down the following formula.
 =C5*C6/12Formula Breakdown:
Here,
C5 = Initial Balance =Â $2,000
C6 = Annual Interest Rate =Â 20%
We are calculating monthly interest amounts. So, we have divided the annual interest rate by 12.
- Upon pressing ENTER, we will get the monthly interest amounts for the Visa credit card.
- We will drag the Fill Handle rightward to apply the formula to the Mastercard credit card.
- Now, we will get the monthly interest amounts for the Mastercard credit card.
Read More: How to Calculate Interest on a Loan in Excel
Step 2: Find Out the New Balance to be Paid in Excel to Calculate Credit Card Interest
- Now, we will calculate the new balance for the Visa credit card that we have to pay. We will write down the below formula.
=C5+C7-C8Formula Breakdown:
Here,
C5 = Initial Balance =Â $2,000
C7 = Monthly Interest Amount=Â Â $33
C8 = Â Minimum Payment = Â $100
We will have to pay the Initial Balance and the Monthly Interest Amount. But we have already paid the Minimum Payment. So, we will subtract the Minimum Payment from the sum of the Initial Balance and the Monthly Interest Amount to calculate the New Balance.
- Upon pressing ENTER, we will get the New Balance for the Visa credit card.
- We will drag the Fill Handle rightward to apply the formula to the Mastercard credit card. We will get the New Balance for the Mastercard credit card.
Read More: How to Calculate Interest in Excel with Payments
Step 3: Calculate the New Balance to be Paid in Excel
- Finally, we will calculate the Total Payment for all our credit cards. We will write down the below formula.
=SUM(C10:D10)Formula Breakdown:
Here,
C10 = New Balance for the Visa credit card=Â Â $1,933
D10 = New Balance for the Mastercard credit card=Â Â $958
The SUM function will sum up all the cell values in the given range. So, it will sum up both the New Balances for the Visa and Mastercard credit cards to calculate the Total Payment for the 2 credit cards.
- Upon pressing ENTER, we will get the Total Payment for both of our credit cards.
Quick Notes
🎯 Always use the correct format for each cell value. For example, Initial Balance, Monthly Interest Amount, and Minimum Payment will always be in the Currency format. The Annual Interest Rate will be in the Percentage format.
🎯 Select a cell and right-click on it. Select Format Cell from the window that will appear. Select the Currency or Percentage format depending on the type of the cell value.
Download Practice Workbook
Download this practice book to exercise the task while you are reading this article.
Conclusion
In this article, we have learned how to calculate credit card interest in Excel. I hope from now on you can calculate credit card interest in Excel very easily. However, if you have any queries or recommendations about this article, please leave a comment below. Have a great day!!!
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