Understanding Credit Cards

[bobbrews]

Help me to understand this scenario:

You charge $200 between August 13, 2012 and September 13, 2012 with a payment due date of October 10, 2012.

You pay $100 on the due date instead of making the minimum $15 payment and/or paying in full. You expect to have the remaining $100 paid in full on October 30, 2012.

You also charged an additional $200 after September 13th, which will carry over to the next payment due date in November. Thus, between October 10 - October 30, you have a balance of $300 pending payment.

My question is... Are you paying interest for the combined $300 in unpaid charges until you pay off the remaining $100 from the previous bill? Or are you simply paying interest on the $100 that you neglected to pay off in full on October 10th with the $200 charged thereafter not factored in when it comes to interest?

 

[ReverseApacheMaster]

Usually credit cards have a 30 day grace period on purchases before interest begins to apply. So you are paying no interest on the latter $200 until 30 days have passed. You are paying interest on all charges more than 30 days old. Payments should be paid first in first out but you will have to look at your cardholder agreement for the card to know for sure.

 

[bobbrews]

Thanks, I was kind of scratching my head since some cards (BOA) charge interest almost immediately after a partial payment, whereas I haven't seen any accumulated interest charges on the other card (Discover)... assuming I pay the previous balance off in full before the next due date (but only make a partial payment after the previous due date).

 

[Hang Glider]

read your fine print. it's in there. has to be by law.

 

[duboman]

Definitely read the fine print as every card is different. Some charge interest on your average daily balance regardless of when the purchase was made. In addition, some banks will charge you an additional month interest after you pay off a balance due to the average daily balance calculations.

 

[TyTanium]

You can also just call them and ask.