topic interest question in Credit Cards

interest question

Anonymous — Thu, 22 May 2008 16:08:35 GMT

I just want to make sure. I had a Discover with a big balance, and I BTed through 2 new credit cards the balance away completely. Both of the BTs cleared today (it shows up on my online account), which also is my due date. Since my account now reads ZERO, does that mean I escaped all interest charges?

Re: interest question

athensguy — Thu, 22 May 2008 16:14:37 GMT

Did you pay the whole new balance by the due date this time AND last time?

Re: interest question

Anonymous — Thu, 22 May 2008 17:15:10 GMT

No, last month I had a balance. I did not charge anything new, just paid off the balance completely this month.

Re: interest question

Anonymous — Thu, 22 May 2008 17:15:48 GMT

I suppose you are getting at the whole 2-cycle thing? Is Discover that way?

Re: interest question

athensguy — Thu, 22 May 2008 17:35:35 GMT

Two cycle billing determines the balance that interest is calculate from. No, that's not what I'm talking about. Discover used to use two cycle billing, but I think they have changed to regular average daily balance interest calculation.

It's hard for me to explain, so there is probably someone else that can do a better job. However, the thing is that you do not have a grace period for carried balances if you did not pay the new balance by the due date last time, so interest has continued to accrue from the day the statement cut. If you pay off the new balance this time (which you did) and on your next statement, there should be no finance charges after that as long as you continue to pay off the new balances.

Re: interest question

Anonymous — Thu, 22 May 2008 18:42:10 GMT

So.......in reality in order to avoid finance charges, you have to PIF 2 months in a row. You can purchase things, but on the due date, you have to have zero balances, two months consecutively. Is that right?

Thanks!

Re: interest question

athensguy — Thu, 22 May 2008 18:53:57 GMT

You don't have to have a zero balance, you just have to pay the "New Balance" (which is the balance reported on your statement, and usually called exactly that) by the Due Date, and you have to do it at least twice in a row to avoid interest, if you were previously carrying a balance.

So if your new balance was $200 and you charged $300 after the statement cut, and you paid the new balance of 200, the 300 would be the new balance next time, and then you'd need to pay at least 300 next time to avoid interest.

Re: interest question

Anonymous — Thu, 22 May 2008 19:11:21 GMT

my chase card statmaent cut on first, paid it off the 9th , I want to use the card before the next staement, so I call up and it was explain on my next statement, I would be charge interest for 1st-9th, but purchaes after the 9th would subject to grace period.

chase is daily average balance and it true all new Discover accounts are also, I just hope they don't change my account like chase did, two cycle should be prffered among non-revovling

my discover and Wamu are two cycle

inorder for these accounts to be PIF I must pay $116.35 my 06/10 and to discover $25.26 by 06/01

But the thing about these amounts are that they May's statement balance

So because I NEVER carry a balance on these cards. instead of my grace period of time between my bill and and my new balance is due, I get the grace period new balance since I paid the previous cycles statement balance.

with single cycle you pay off cycles ie. junes payment is for mays purchases , two cycle you pay off statements ie. june payment is for Mays statement balance

Message Edited by rbbyrbsn on 05-22-2008 12:11 PM