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Established Contributor
linux007969
Posts: 640
Registered: ‎04-20-2012
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Re: Residual Interest


ryanbush wrote:

linux007969 wrote:

What kind of crap is this? If you pay off your card to zero and dont charge anymore they can't all of a sudden charge you interest and then shutdown your account, there's gotta be more to your post cuz that's just illegal otherwise.


if you have been carrying a balance, even though you payoff your statement balance you are going to owe them for the interest you accrued between the statement you paid off and you're next statement.  it's call residual interest


If you pay it off they shouldn't be able to get away with this, and then if they do what happens the following cycle, i mean are they allowed to charge you interest on the interest? I would fight this all the way to the executive office and blast their facebook till they fix it and remove the illegal charge in my opinion.

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enharu
Posts: 7,132
Registered: ‎02-27-2013
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Re: Residual Interest

They are allowed to charge u interests, late fees and all kinds of dumb fees on interests. Works this way for every bank loan.

Makes no sense, but this is how banks work to screw people over.
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linux007969
Posts: 640
Registered: ‎04-20-2012
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Re: Residual Interest


enharu wrote:
They are allowed to charge u interests, late fees and all kinds of dumb fees on interests. Works this way for every bank loan.

Makes no sense, but this is how banks work to screw people over.

I know they can charge you interest but what they can't do it charge you after you paid in full and stopped using your card for a few days or more.

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enharu
Posts: 7,132
Registered: ‎02-27-2013
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Re: Residual Interest

What they charged him for right now, is interests for the time period between his statement date, and the time he paid.

Technically it's like u been carrying a balance from the money borrowed that due in 30 days but u paid on the 29th day. Technically u owe interests on those 29 days.

If it were your friend who loaned u the money, Common human decency would tell him not to charge u interests for those 29 days. But banks aren't exactly your BFF so they charge u interests.

I got screwed the same way by Macy's, though its not as extreme as op.
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Established Contributor
linux007969
Posts: 640
Registered: ‎04-20-2012
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Re: Residual Interest


enharu wrote:
What they charged him for right now, is interests for the time period between his statement date, and the time he paid.

Technically it's like u been carrying a balance from the money borrowed that due in 30 days but u paid on the 29th day. Technically u owe interests on those 29 days.

If it were your friend who loaned u the money, Common human decency would tell him not to charge u interests for those 29 days. But banks aren't exactly your BFF so they charge u interests.

I got screwed the same way by Macy's, though its not as extreme as op.

Ok I think i get it, but ya they should have no reason to close the account just cuz ya owe them another interest charge, i mean if you owe them money and intend to pay by the due date they shouldnt shut you down like that or did op not pay by the due date?

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enharu
Posts: 7,132
Registered: ‎02-27-2013
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Re: Residual Interest

He probably wasn't expecting anymore charges from boa, didn't get any statements or disregarded them since he was expecting a zero balance. However, it was not at zero balance, so he had to make at least minimum payment which he didn't. Eventually it became 30, then 60, then 90 day late and went into collections as it remains unpaid. There's probably a crapload of late fees, interest fee on that interests he owed, ca fees and all that crap that got bundled into the total sum CAs are trying to collect from him now. It's ugly, but hopefully BofA is going to be accommodating to him since he's been a customer for 2 years. He even had the signature visa too.
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Senior Contributor
youngandcreditwrthy
Posts: 6,242
Registered: ‎08-16-2012
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Re: Residual Interest

Isn't there a 25-30 day grace period in which no interest charge? "Float" if you will?

Check your cardmember agreement op!!
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Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
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Re: Residual Interest

As others have said, this is almost universal on bank loans, and, contrary to opinions here, really makes sense.

 

This is the hidden danger of carrying a balance (or cash advance for that matter).   What you need to understand is that the statement is merely a snapshot of what you owe at that moment.  If you are just making purchases, and PIF before the due date, it is also a complete statement of what you owe, because of the grace periods.  But in any other circumstances, it isn't!

 

 

Valued Contributor
ryanbush
Posts: 1,292
Registered: ‎08-19-2012
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Re: Residual Interest

[ Edited ]

youngandcreditwrthy wrote:
Isn't there a 25-30 day grace period in which no interest charge? "Float" if you will?

Check your cardmember agreement op!!

NO, if you don't pay your balance in FULL the grace period goes away.  the OP stated he had been carrying a balance.

 

For example if you had been carrying a balance for say 6 months,  you're statement cuts on the 15th and you PIF on the 25th.  You still owe them for the interest on your balance between the 15th and the 25th.  that interest charge will be on your next statement

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Established Contributor
Simply827
Posts: 742
Registered: ‎10-15-2012
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Re: Residual Interest


ryanbush wrote:

youngandcreditwrthy wrote:
Isn't there a 25-30 day grace period in which no interest charge? "Float" if you will?

Check your cardmember agreement op!!

NO, if you don't pay your balance in FULL the grace period goes away.  the OP stated he had been carrying a balance.

 

For example if you had been carrying a balance for say 6 months,  you're statement cuts on the 15th and you PIF on the 25th.  You still owe them for the interest on your balance between the 15th and the 25th.  that interest charge will be on your next statement


Why wouldn't the charge for that interest show up in the "Current Balance" Line? Do they not formally charge it until the next statement cuts?

 

I'm glad I'm learning about this. I'll be sure to check my accounts even after I PIF.


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