Accrual Rate

How often interest is calculated. This could be for your credit card, student loan or anything that charges or pays interest. Most accrual rates are daily, which means you’re getting charged interest every single day for that 60-inch TV put on your credit card. So if 20% a year is the annual rate you're being charged, then it is compounded as a function of (The Amount You Owe) times (1 + 0.2/365), iterated 365 times daily a year. And yes, it is in fact...a cruel rate.