Would this cause interest?

For just about anything you want to get off your chest about credit cards.
6 posts
lorkat89
Green Member
Green Member
 
Posts: 17
Joined: Thu May 03, 2012 8:58 pm
Location: Georgia

Would this cause interest?

Postby lorkat89 » Fri Apr 28, 2017 4:55 pm

Let's say when my statement closes the balance is $50. I then charge $70 to the card and then pay $70. If the $50 is still there would I pay interest? Or would the $50 from the $70 cover it. And the $50 balance is a new one?

50+70=120-70=50
Capital One Quicksilver - $5k


User avatar
CarefulBuilder14
Centurion Member
Centurion Member
 
Posts: 4444
Joined: Thu May 08, 2014 7:42 pm
Location: United States

Re: Would this cause interest?

Postby CarefulBuilder14 » Fri Apr 28, 2017 5:00 pm

lorkat89 wrote:Let's say when my statement closes the balance is $50. I then charge $70 to the card and then pay $70. If the $50 is still there would I pay interest? Or would the $50 from the $70 cover it. And the $50 balance is a new one?

50+70=120-70=50

No interest in that case.

But if you spent $120, paid $70, and then had the statement close, then the $70 wouldn't count as part of the minimum payment for the closed statement.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

takeshi
Centurion Member
Centurion Member
 
Posts: 1741
Joined: Wed Jun 05, 2013 3:12 pm
Location: US

Re: Would this cause interest?

Postby takeshi » Tue May 02, 2017 2:27 pm

You need to consider not just the current balance but the statement cycles and the statement balances. Paying $50 would pay the first cycle in full so you would not incur interest on that cycle. The remaining $20 of that payment would reduce the balance on the following cycle to $50.

TXviking
Centurion Member
Centurion Member
 
Posts: 432
Joined: Fri Apr 15, 2016 5:46 pm
Location: Palm Beach, Florida

Re: Would this cause interest?

Postby TXviking » Thu May 04, 2017 12:47 pm

A simple rule of thumb: If you pay your statement balance in full, you won't incur interest. Your current balance has nothing to do with it until the next statement.

As takeshi pointed out, in your example the $70 would apply to your $50 existing balance first, paying off your statement balance. It would not just cancel out the new $70 charge.

To clarify with a similar example: Let's say you have a $70 statement balance, you charge $50 to the card and then make a payment for $50. In this case, you WOULD incur interest because $50 is not enough to satisfy your statement balance. However, you would only pay interest on the remaining $20. The new purchase won't affect your statement balance until the following billing cycle. Hope that makes sense.

nbpadillo
 
Posts: 1
Joined: Sat Aug 26, 2017 2:18 am

Re: Would this cause interest?

Postby nbpadillo » Sat Aug 26, 2017 2:55 am

lorkat89 wrote:Let's say when my statement closes the balance is $50. I then charge $70 to the card and then pay $70. If the $50 is still there would I pay interest? Or would the $50 from the $70 cover it. And the $50 balance is a new one?

50+70=120-70=50


Hi,

yes, everytime there is a balance at the end of cut-off or statement period . as long as your bill is not zero out. an interest will be applied to the previous balance.

swipe_masta
Centurion Member
Centurion Member
 
Posts: 227
Joined: Tue Feb 19, 2013 5:22 pm
Location: USA

Re: Would this cause interest?

Postby swipe_masta » Tue Aug 29, 2017 8:47 pm

I'd also like to point out that a credit to your account does not count as a payment. For example, making a return on a purchase or redeeming rewards as a statement credit do not count as payments towards your statement balance unless it covers the whole balance.

Reading thru this and many other blogs, a lot of people vent about such issues.



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 3 guests