Daily interest costs show how quickly a balance grows between monthly statements. A simple estimate is:
Daily interest = balance × annual interest rate ÷ 365
For example, a £2,000 balance at a 24% annual rate costs roughly £1.32 per day before compounding and payment changes. The exact amount depends on the card provider’s calculation method, the balance carried each day and when payments are credited.
An annual rate can feel distant, while a daily cost makes the effect easier to compare. Check the interest rate rather than relying only on APR, because APR can include fees and other charges. For an arranged overdraft, use the stated EAR and remember that the balance may change as money enters and leaves the account. Promotional rates, new purchases and missed payments can also alter the calculation. This practical guide to current personal-finance resources offers further reading.
List each card or overdraft with its balance, rate and daily cost. Add the figures to see the total cost of carrying the balances. Paying the highest-rate balance first usually reduces interest fastest, while clearing a smaller balance first can simplify your accounts. Continue making at least the required payment on every account, and direct any extra amount to the chosen balance.
Updraft’s app shows connected balances and breaks down the interest cost by account, helping people see what they owe, what it costs each day and how payments change the payoff timeline. A fixed-rate loan is another option to compare, but assess the total amount repayable, arrangement fee, monthly repayment and end date against the existing card costs. The key test is whether the cards are actually cleared and the new total cost fits comfortably within the budget.