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No grace period on Discover? That's news to me.

Senior Contributor

Re: No grace period on Discover? That's news to me.


lithium78 wrote:

SwampSystems wrote:

Paying Interest:  We begin to impose interest charges on a transaction, fee or interest charge from the day we add it to the daily balance. We continue to impose interest charges until you pay the total amount you owe us. You can avoid paying interest on Purchases as described below. However, you cannot avoid paying interest on Balance Transfers or Cash Advances.

 

How to Avoid Paying Interest on Purchases ("Grace Period") 
If you paid the New Balance on your previous billing statement by the Payment Due Date shown on that billing statement, we will not impose interest charges on new Purchases, or any portion of a new Purchase, paid by the Payment Due Date on your current billing statement. New Purchases are Purchases that first appear on the current billing statement.

 

How We Apply Payments May Impact Your Grace Period 
If you do not pay your New Balance in full each month, then, depending on the balance to which we apply your payment, you may not get a grace period on new Purchases.

 

How We Calculate Interest Charges - Daily Balance Method (including current transactions):  We calculate interest charges each billing period by first figuring the "daily balance" for each Transaction Category. Transaction Categories include standard Purchases, standard Cash Advances and different promotional balances, such as Balance Transfers.

 

 

How We Figure the Daily Balance for Each Transaction Category

  • We start with the beginning balance for each day. The beginning balance for the first day of the billing period is your balance on the last day of your previous billing period.
  • We add any interest charges accrued on the previous day's daily balance and any new transactions and fees. We add any new transactions or fees as of the later of the Transaction Date or the first day of the billing period in which the transaction or fee posted to your Account.
  • We subtract any new credits and payments.
  • We make other adjustments (including those adjustments required in the "Paying Interest" section).

 

 

How We Figure Your Total Interest Charges

  • We multiply the daily balance for each Transaction Category by its daily periodic rate. We do this for each day in the billing period. This gives us the interest charges for each Transaction Category. To get a daily periodic rate, we divide the APR that applies to the Transaction Category by 365.
  • We add up all the daily interest charges. The sum is the total interest charge for the billing period.

 

 

How We Include Fees 
We add Balance Transfer Fees to the applicable Balance Transfer Transaction Category. We add Cash Advance Fees to the applicable Cash Advance Transaction Category. We add all other fees to the standard Purchase Transaction Category.

 

Balance Subject to Interest Rate. Your statement shows a Balance Subject to Interest Rate. It shows this for each transaction category. The Balance Subject to Interest Rate is the average of the daily balances during the billing period.


So, basically, I no longer have a grace period because I have a balance transfer amount, since that leaves an amount unpaid for a "New Balance".  Am I reading that right?


Correct. This is why they love it when a card holder makes ANY purchases while carrying a BT. To avoid interest on new purchases a card holder must use a different (PIF) cc.

DCU EQ 5.0, Citi EQ 08 Bankcard, PenFed EX NG2
EX 08: AFCU, Amex, Chase, PSECU EX 98(?)
TU 08: Barclays, Discover
Message 11 of 19
Valued Contributor

Re: No grace period on Discover? That's news to me.

Again, this is not Discover problem or Discover game. All CC now does this. CARD Act defines what payment goes to where.

 

@score_building

 

* Minimum payment amount applies to balance with lowest APR. In your case it is BT.

* Any amount over minimum payment applies to balance with highest APR. In your case it is purchases.

 

So you need to pay purchase amount + minimum payment + $10 (torward daily interest accured by purchase).

Message 12 of 19
Frequent Contributor

Re: No grace period on Discover? That's news to me.

Chase, on the other hand, told me that it is possible to continue to use my Freedom card for purchases while carrying a 0% balance transfer without paying additional interest, as long as I pay the minimum payment + the total amount of all new purchases every month.

 

EDIT: Just got off the phone with Chase again and they said this is not the case unless you have explicitly set up Blueprint. I went ahead and set up Blueprint Full Pay for all purchase categories, and I'm going to call them again later and see if the purchases I already made this month can be included. There is a sample Blueprint statement that shows how it works.

Message 13 of 19
Senior Contributor

Re: No grace period on Discover? That's news to me.


trumpet-205 wrote:

Again, this is not Discover problem or Discover game. All CC now does this. CARD Act defines what payment goes to where.

 

@score_building

 

* Minimum payment amount applies to balance with lowest APR. In your case it is BT.

* Any amount over minimum payment applies to balance with highest APR. In your case it is purchases.

 

So you need to pay purchase amount + minimum payment + $10 (toward daily interest accrued by purchase).


RIght so one cannot avoid paying some interest on new purchases (when a BT balance exists) since new purchases begin to accrue interest immediately at check out.

DCU EQ 5.0, Citi EQ 08 Bankcard, PenFed EX NG2
EX 08: AFCU, Amex, Chase, PSECU EX 98(?)
TU 08: Barclays, Discover
Message 14 of 19
Frequent Contributor

Re: No grace period on Discover? That's news to me.

I just called Chase again. This time, since I was given conflicting information on my previous calls, I was transferred to a senior accounts specialist who told me that the earlier representative was correct -- as long as the minimum payment + the amount of all new purchases was paid, no new interest would be charged, regardless of enrollment in Blueprint. He said this is due to anything over the minimum payment automatically applying to the highest APR charges first. He also said he would be contacting the rep who took the earlier card to correct them.

 

I'd like to keep you guys posted on the outcome of this once I get my next statement. I apologize to the OP for threadjacking, but if this information is correct, it may sway more people to carry balance transfers on their Chase cards than their Discover cards. I had the choice of similar offers on either card, and I'm sure many of us have had the same offers.

Message 15 of 19
Contributor

Re: No grace period on Discover? That's news to me.

WHY I LOVE Navy Federal.  I had a balance on my account last month (in fact I made no payment oops, but I normally pay in full)  Anyway, I PIF and my statement shows NO INTEREST.  Nada!  Zero%  YEAY!!!  Last month I paid 9 bucks on 850.00 balance but nothing this month.  Another reason to go Navy Fed

Starting scores: EQ 420, EX 421, TU 405 (Jan 2011)
Bk Ch 7 Discharged Mar 2011
Current scores: EQ 456, EX 534, TU 411 (Aug 2012) FICO (8/2012 -- EQ 564, EX 584 (from BofA) TU 551)
Goal scores: EQ 700+, EX 700+, TU 700+

Credit accounts: 30% APR auto loan (Jan 2012), Secured [CapOne (3K), PNC (1300), NFCU (1K), Coke (2500)] and Target (200)
Message 16 of 19
Mega Contributor

Re: No grace period on Discover? That's news to me.

@tboy did you have a BT on that NFCU card plus regular charges?



EQ FICO 548 3/3/16
Message 17 of 19
Contributor

Re: No grace period on Discover? That's news to me.

Not a balance transfer, but definitely the card was maxxed out.  I paid interest last month, but PIF and no interest this month.  I PIF two days before statement,

Starting scores: EQ 420, EX 421, TU 405 (Jan 2011)
Bk Ch 7 Discharged Mar 2011
Current scores: EQ 456, EX 534, TU 411 (Aug 2012) FICO (8/2012 -- EQ 564, EX 584 (from BofA) TU 551)
Goal scores: EQ 700+, EX 700+, TU 700+

Credit accounts: 30% APR auto loan (Jan 2012), Secured [CapOne (3K), PNC (1300), NFCU (1K), Coke (2500)] and Target (200)
Message 18 of 19
Established Contributor

Re: No grace period on Discover? That's news to me.

The senior chase rep was correct about the agent being correct Smiley Happy Only exception to that rule is the Disney card but that's another can.

-Rebuilding with CapOne Cash: $1.5k, NFCU cashRewards $8.5K, NavCheck $5K, Wal-Mart: $1.1K, Sam's: $1.2K, Amazon: $1.9K, Apple Barclay: $3K, Haverty's: $1.5K, GE capital: $5K, Sears: $250(AU), PP MC:$1.5K, CareCredit:$3K (closed 1st home 05/08/13)
Starting Score: 492-TU04, 480-EX FICO V2, 467-EQ Beacon 5 (Via Mortgage PreQual March '12)
Current Score: EX,EQ,TU (lender pull): 652, 659, 689, Walmart TU FICO: 691 (05/13)
Goal Score: 700

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Message 19 of 19