Is this right?

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MemberSince99
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Postby MemberSince99 » Sun Jul 14, 2013 3:10 pm

Maybe so BUT it should ONLY be applied to the amount that isn't paid by the date due, NOT the entire thing. If you charge 4500 at the start of your cycle then pay 4450 by the due date, you shouldn't owe interest on the full 4500 as if you paid nothing. That would have to be illegal. Something isn't correct here. Rather than us sit around and debate in a big circle jerk that leads nowhere, it would be the easiest thing for the OP to just give them a call and find out. Otherwise your guess is just as good as mine.


flan
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Postby flan » Sun Jul 14, 2013 3:34 pm

MemberSince99 wrote:Maybe so BUT it should ONLY be applied to the amount that isn't paid by the date due, NOT the entire thing. If you charge 4500 at the start of your cycle then pay 4450 by the due date, you shouldn't owe interest on the full 4500 as if you paid nothing. That would have to be illegal. Something isn't correct here. Rather than us sit around and debate in a big circle jerk that leads nowhere, it would be the easiest thing for the OP to just give them a call and find out. Otherwise your guess is just as good as mine.


No. If you pay the entire balance by the due date, they do not charge interest. If you do not pay the entire balance, even if you pay only a dollar less, they charge interest. That's essentially universal practice, not unique to chase. It will also mean they charge interest on purchases made between when the first statement cuts, and the due date.

I'd thought they were using average daily balance, but it looks like they use the daily balance method. So they apply (roughly) 1/365th the annual rate to the balance at the close of every business day. Not too much difference between that and AV. daily balance, at least under most circumstances.

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Postby paparoach429 » Mon Jul 15, 2013 2:42 am

+1 @flan, I called Chase as I was in a hurry earlier and from what I understood that's basically what they said. Being that I didn't entirely pay it off, interest was charged from the whole month.. Do you guys recognize this on your CSP's?

MemberSince99
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Postby MemberSince99 » Mon Jul 15, 2013 6:35 am

Either I'm getting senile and read this wrong, or basically a 50 dollar balance was left that caused about that much in interest charges.

There is no way that is right. It doesn't compute unless they are using payday loan shark rates.

flan
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Postby flan » Mon Jul 15, 2013 7:49 am

MemberSince99 wrote:Either I'm getting senile and read this wrong, or basically a 50 dollar balance was left that caused about that much in interest charges.

There is no way that is right. It doesn't compute unless they are using payday loan shark rates.


It's not interest on a 50 balance. It's interest on the daily balance. So it's almost a month's interest on the much higher balance. And if you carry a balance, you don't get a grace period on new charges.

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Postby mattymatt808 » Mon Jul 15, 2013 3:45 pm

MemberSince99 wrote:Either I'm getting senile and read this wrong, or basically a 50 dollar balance was left that caused about that much in interest charges.

There is no way that is right. It doesn't compute unless they are using payday loan shark rates.


Every day a little bit of interest gets added to the "pot" and if you pay the entire monthly balance in full the pot goes away completely. If you leave even a little bit unpaid you pay the whole pot.
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MemberSince99
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Postby MemberSince99 » Mon Jul 15, 2013 4:11 pm

Ok thanks guys. Not doubting you, but that's just hard to believe they can get away with that, it's damn near usary.

All the more reason to NEVER carry a balance. Thanks for the educattion. I have not carried a balance in so many years I have no clue what happens when you do I simply never do it. Now I see another example of why that's a good idea.

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Postby DoingHomework » Mon Jul 15, 2013 4:22 pm

MemberSince99 wrote:Ok thanks guys. Not doubting you, but that's just hard to believe they can get away with that, it's damn near usary.

All the more reason to NEVER carry a balance. Thanks for the educattion. I have not carried a balance in so many years I have no clue what happens when you do I simply never do it. Now I see another example of why that's a good idea.


Yep, I haven't carried a balance since the 90s...except once when I transposed digits on an online payment. I paid something like $2938.55 when the balance was $2983.55. Chase hit me with interest along the lines of what was mentioned. I don't remember the exact figures because it was about 7 years ago but I remember the interest was a little under $40. I was annoyed with myself for making the mistake but didn't blame Chase. But then I decided to call anyway to whine about it. I have been with them since the 1970s so I have a little history. Anyway, they actually waived the interest for me since it was a mistake. Personally I think they bought a whole lot of goodwill with that gesture since it was totally my boneheaded mistake!

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Postby Robrus1 » Mon Jul 15, 2013 7:12 pm

flan wrote:No. If you pay the entire balance by the due date, they do not charge interest. If you do not pay the entire balance, even if you pay only a dollar less, they charge interest. That's essentially universal practice, not unique to chase. It will also mean they charge interest on purchases made between when the first statement cuts, and the due date.

I'd thought they were using average daily balance, but it looks like they use the daily balance method. So they apply (roughly) 1/365th the annual rate to the balance at the close of every business day. Not too much difference between that and AV. daily balance, at least under most circumstances.


OK just so we're clear, when you say entire balance, do you mean entire statement balance or entire balance including charges made after the statement cuts? The reason I ask is I spent quite a bit on my CSP while on vacation in Europe a few weeks ago. My balance is pretty high and on Friday I'll be paying in full for all posted charges, but there could still be pending charges I make between now and Friday. I don't want to be charged any interest so if I need to not use it for the rest of the week to make sure there are no pending charges and bring the balance down to a true zero, then I'll do so. I have a feeling it's probabaly just the statement balance but I just want to make sure. Thanks.
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Postby flan » Mon Jul 15, 2013 9:59 pm

Robrus1 wrote:OK just so we're clear, when you say entire balance, do you mean entire statement balance or entire balance including charges made after the statement cuts? The reason I ask is I spent quite a bit on my CSP while on vacation in Europe a few weeks ago. My balance is pretty high and on Friday I'll be paying in full for all posted charges, but there could still be pending charges I make between now and Friday. I don't want to be charged any interest so if I need to not use it for the rest of the week to make sure there are no pending charges and bring the balance down to a true zero, then I'll do so. I have a feeling it's probabaly just the statement balance but I just want to make sure. Thanks.


For most non-loan-shark cards, the full statement balance. I'm pretty sure the CSP works that way (I don't have one; I do have a freedom, it does.). I'm one of those weirdos (like 99% of the population, except around here) that lets charges report on the statement, and then pays the statement balance (exactly on the due date, of course, why pay earlier?). I never pay credit card interest (well, I have, because I've screwed up and paid the wrong amount, but lets not talk about that, eh?).

I make payments before the statement cuts only for charges that I'm reimbursed for, but only because it simplifies my accounting, not because I'm worried about it. If you've got any doubts, call the bank...



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