Interest on credit cards is calculated in how many ways?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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fearless
 
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Interest on credit cards is calculated in how many ways?

Postby fearless » Wed Jan 19, 2011 12:16 am

How many different ways can credit card interest be calculated? I have found average daily balance, adjusted balance, previous balance, ending balance, and two-cycle billing. Are these all the ways and is the average daily balance the most common?


JakeC
 
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Joined: Fri Jan 21, 2011 5:27 pm

Postby JakeC » Fri Jan 21, 2011 5:29 pm

I am fairly confident that two cycle billing is no longer legal in the USA. Discover did that to me before the reform and I canceled my card because of it.

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Elliot Castro
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Postby Elliot Castro » Sat Jan 22, 2011 3:19 pm

The sad part is, there are over a billion different ways to compute how credit card interest is calculated. Even as far back in the 70's, institutions started to use computer algorithms to do this, cross-indexing over charts just to make it even harder for the consumer to really understand how much penalty they are under.

Not having standards can really be a pain sometimes.



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