Thread: Interest on credit cards is calculated in how many ways?

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?

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.

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.