Credit card interest can be a little tricky, but once you understand how it works, it's actually pretty simple. The first thing you should understand is that credit cards show interest rates on an annual basis, but most credit cards charge interest on a daily basis. So if a credit card has an 18% APR, that means it actually carries an interest rate of about 0.049315% per day (18% ÷ 365 days = 0.049315%). If you have a $5,000 balance, the next day the balance would grow to $5,002.70 at an 18% APR, assuming that no other purchases or payments are made. This interest calculation is made every day during a billing cycle. After 30 days, the $5,000 starting balance would grow to about $5,074.50 at an 18% APR.