I'm a little confused about how credit card companies determine finance charges. For example, if my payment is due on 1/20, I pay off the entire balance on 1/10, then charge another $50, will there be finance charges on the $50 because technically there would be a balance on my card on the day the payment is due? Any clarification would be appreciated.
2007-01-06 14:38:33 · 3 answers · asked by Anonymous in Business & Finance ➔ Credit
No. you are only stuck with finance charges in that situation if you took a cash advance. Regular purchases get a grace period...it would be outlined in your credit card agreement, but is ususally 25 days from the statement closing date.
2007-01-06 15:01:17 · answer #1 · answered by Charming Taurus 3 · 1⤊ 0⤋
Each credit card has a billing cycle. If your bill is due on the 20th of the month and you pay the bill before that date, then you should not accumulate any charges, even though you may have made charges during the time when the last bill dropped and you paid it off. For instance, charges made against your account through 12/20 would be due on 1/20. charges made between 12/20 and 1/20 would be payable by 2/20. That is only an example, since most credit card companies bill on a 30 day cycle, so your bill will probably be due on a slightly different day each month. I recall some credit card companies bill 13 times during a 12 month cycle.
2007-01-06 22:52:42 · answer #2 · answered by Flyby 6 · 1⤊ 0⤋
No. If you pay off your balance each month, you should have no finance charge.
2007-01-06 22:44:44 · answer #3 · answered by rufus_rob 2 · 0⤊ 0⤋