How does credit card interest work?

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How does credit card interest work?

Postby delongpri » Tue Nov 02, 2010 4:52 pm

Does credit card interest start when a purchase is made or after the due date? How does credit card interest work?

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Mogul of Pineapples
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Postby Mogul of Pineapples » Tue Nov 02, 2010 7:19 pm

Credit card interest can be confusing and dangerous if you don't understand it.

Credit card interest works like this for most banks- if the balance is paid in full by the due date there will be no interest charges. If any of the balance is carried over past the due date, then the account is charged interest on that cycles billing period going back all the way to the date of purchase.

Think of it as deferred interest. If payment is in full before the due date there is none. If not the interest is deferred and tacked on to your account after the due date. Make sense?
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