Question about paying off credit cards

[redhed1026]

I recently paid off several credit cards in full. However, I noticed a couple of them have sent me statements showing a balance due for a small amount of interest. I thought that as long as you paid the total amount due, in full, before the due date, there would be no additional interest assessed? Sorry if this seems like a stupid question. I thought that additional interest couldn't accrue on paid balances unless it was double cycle billing (which was supposed to end with the reform?) Again, this isn't the case with all of them that I paid in full, just a couple. Can anyone shed some light on this? Thanks in advance.

[Anonymous]

Technically, you still owe the money between the statement closing date and the date you paid the money back. So, if your account statement cut at the 20th and you pay the money back on the 25th, you still had the borrowed money for 5 days of the next cycle.

[Uborrow-Upay]

redhed1026, if the previous month's balance (the month before the month you paid in full) wasn't paid in full by its due date, you no longer had a grace period.  It's normal to be charged interest on the most recent month's charges, and that interest won't show up on your balance until the statement cuts, which is after your due date.

The long and the short of it is, once you carry a balance, it takes two PIF statements to get back to receiving a statement without any interest charges on it.

Hope this helps.  (And it's a very common question, BTW...not a stupid question at all.) 

[sgs10]

Either you pay your balance in full by due day or start counting your grace period from the date of purchase.

[Wolf3]

Basically, you are being charged interest on the balance from the closing date until you paid in full.  It takes 2 cycles to catch up.

It is not because of double cycle billing, which is illegal as you say.

[vanillabean]

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@Anonymous wrote:

Technically, you still owe the money between the statement closing date and the date you paid the money back. So, if your account statement cut at the 20th and you pay the money back on the 25th, you still had the borrowed money for 5 days of the next cycle.

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That's exactly correct. But it's still possible to zero the 2nd cycle. If you estimate the interest to be $20, overpay by say $30 the balance before the coming statement closing date. The negative balance will be treated as $0 for utilization purposes.