Credit card companies calculate interest only if you do not pay in full before the deadline set on your statement in question. Most charge "backdated" interest on amounts outstanding after the deadline - which date they decide is something I don't know but probably starting with the earliest transaction not fully paid up (i.e. they assume you paid the oldest ones, leaving the rest) - ask your card company who MUST answer your question. The actual interest calculation is probably as follows: If the balance on which interest is to be charged is B and the daily interest rate is r (annual interest expressed as a decimal, 15%equals 0.15, etc. divided by 365) then the balance plus interest on each unpaid transaction is (1+r) times B for one day of interest. The compounding rule means that if the amount is outstanding for d number of days then the balance plus interest is (1+r) to the power d all then multiplied by B. The interest alone is this figure minus B (i.e. this subtraction gives you the compounded interest for d days).