Definition: The daily periodic rate, sometimes called the daily rate, is the rate that’s applied to your average daily balance or daily balance to calculate your finance charge. Your daily periodic rate is calculated by dividing your annual percentage rate by the number of days in the year. For example, if your annual percentage rate is 15.9% and there are 365 days in the year, your daily periodic rate would be 0.0043%.
Some credit card issuers calculate finance charge using the daily rate. They multiply each day's balance by the daily rate, then add each day's interest together to get your monthly finance charge.
Also Known As: daily rate
