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New Contributor
in0wh3r3ul1v3
Posts: 55
Registered: ‎08-15-2011

interest charges even though PIF?

okay, so my statement cuts on the 18th of every month. the statement balance as of 2/18 was 600-something. i made another purchase and that sent my balance up to $823.07. this amount was paid in full on 2/23. today, i was looking at my statement and instead of saying $0.00 as it has for the past couple of weeks, it says $1.95.

 

perhaps i don't understand the way interest charges work, but i thought that paying in full before the due date AND statement date meant that you could avoid paying interest. so i e-mailed chase, and got a prompt response, which i'm hoping you guys can interpret for me. they are crediting me the $1.95, but i'm wondering if i'm in the wrong or this is chase's fault?

 

"Dear Justin,

 

I am writing in response to your inquiry regarding your
Chase account.

After reviewing your account, I see that the new billing
period began on 03/18/12. The interest charge on your
statement reflects accruals from 02/18/12, through the day
we received your payment on 02/23/12. Further, your
account stopped accruing these interest charges that day
and will not receive any more interest charges, as long as
you continue to pay the new statement balance by the due
date.

As you have been a valued cardmember, I have credited your
account $1.95 in interest charges. You will see this
adjustment listed on your upcoming billing statement.

We value your business. If you have any further questions,
please reply using the Secure Message Center"

 

so, again, in short, why am i accruing interest charges on purchases EVEN THOUGH they've been paid off?

Macy's Red Star Rewards - $1900 (1/2010)
AMEX Green - NPSL (8/2011)
Amazon Rewards Visa - $1200 (11/2011)
Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009

Re: interest charges even though PIF?

Did you carry a balance the month before?  It pretty much takes two billing cycles to remove interest altogether once you start paying in full.  The day they sent you your statement, that had the amount to pay plus interest through that day.  They are continuing to calculate interest daily, so the $1.85 is what you owed for that previous month's balance for the few extra days before they received your payment.


Starting Score: ~500 (12/01/2008)
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Established Contributor
Koop10010
Posts: 731
Registered: ‎02-15-2012

Re: interest charges even though PIF?

If you have been carrying a balance, interest accrues until the payment is received.  So even if your statement cuts on the 18th, if your payment is received on the 23rd, there will still be some interest on the next statement.  This is because the balance was still building interest from the 18th to the 23rd.  This is why 95% of the time, it takes two months in full payments to stop interest.  There are a few cards out there that waive that last bit of interest, but that's not common practice.

FICOs (2/24/12): EX 752, EQ 740
Chase Sapphire Preferred, Freedom; American Express PR Gold, Blue Cash Everyday
Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011

Re: interest charges even though PIF?


Walt_K wrote:

Did you carry a balance the month before?  It pretty much takes two billing cycles to remove interest altogether once you start paying in full.  The day they sent you your statement, that had the amount to pay plus interest through that day.  They are continuing to calculate interest daily, so the $1.85 is what you owed for that previous month's balance for the few extra days before they received your payment.


+1




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Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
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New Contributor
in0wh3r3ul1v3
Posts: 55
Registered: ‎08-15-2011

Re: interest charges even though PIF?

thank you both for your response.. that's fascinating.

 

i really can only speak from PIF use of my amex, which obviously doesn't have interest charges.... but i figured that because i, a) was charged interest the month before, b) repaid my new purchase in the same statement period and c) paid the full statement balance, that there would be no more charges.

 

anyway, this is good to know. and at least chase gave me the credit, even if i am in the wrong, heh.

Macy's Red Star Rewards - $1900 (1/2010)
AMEX Green - NPSL (8/2011)
Amazon Rewards Visa - $1200 (11/2011)
Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011

Re: interest charges even though PIF?


in0wh3r3ul1v3 wrote:

thank you both for your response.. that's fascinating.

 

i really can only speak from PIF use of my amex, which obviously doesn't have interest charges.... but i figured that because i, a) was charged interest the month before, b) repaid my new purchase in the same statement period and c) paid the full statement balance, that there would be no more charges.

 

anyway, this is good to know. and at least chase gave me the credit, even if i am in the wrong, heh.


Good way to look at it!! lesson learned!




Silver Spade Garden Club Member - Last App 12/16/13 - Looking for a clean slate NO INQ's / Diamond Inspired!
Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
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Established Member
cardcrazyboi
Posts: 112
Registered: ‎03-18-2012

Re: interest charges even though PIF?

i had this problem b4 on my macys card i pay PIF after the bills generate they charges me $2 and i call and ask CS told me the interest already kick in , but she was nice to wave that $2 since i pretend that i didnt know about it..guilty as charge:smileytongue::smileywink:

New Contributor
squirrely2005
Posts: 83
Registered: ‎02-01-2012

Re: interest charges even though PIF?

I have a question because I'm sure that I understand but not totally. So if there was no balance to start with and then the statment cut on the 18th if the balance is paid by the due date is any interest accrued or does the balance have to be paid on the 18th to avoid interest?

Senior Contributor
Wolf3
Posts: 3,198
Registered: ‎01-24-2010

Re: interest charges even though PIF?


squirrely2005 wrote:

I have a question because I'm sure that I understand but not totally. So if there was no balance to start with and then the statment cut on the 18th if the balance is paid by the due date is any interest accrued or does the balance have to be paid on the 18th to avoid interest?


If you have a zero balance on 1/18 and then make charges between 1/18 and 2/18, and you pay the full statement balance by due date 3/15 you will incur no interest.

Any charges between 2/18 and 3/18 would be on the next statement balance and if you pay the full statement balance by the due date 4/15, again no interest.


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