BoA using 2 statement cycles to charge interest

[gdale6]

I just discovered BoA is using the 2 cycle statement for interest charges. Crooks these sobs all are. IIRC this is now illegal??

[Eyepinpools]

Can you explain this? 

[SoCalGardener]

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@Eyepinpools wrote:

Can you explain this? 

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Yes, please do! I'm baffled.

[simplynoir]

Are we talking about trailing interest here?

[gdale6]

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@Eyepinpools wrote:

Can you explain this? 

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Sure, I put a 2500 purchase on the card in May have been paying it down till i paid it completely off prior to the due date of my August statement and yet I was charged additional interest even though the purchase had been paid to zippo. Due date of the August statement was Sept 19 and it was totally paid off Sept 17 yet they charge me interest on my Sept Stmt.

[Anonymous]

I think @gdale6 is referring to this: Double-Cycle Billing Definition (investopedia.com)

Banned in 2009 so it would be surprising if it was still explicitly used

ETA: oh, looks like it WAS trailing interest, which is certainly legal

[CreditPacMan]

Bank of America always does that to me. I PIF before the due date, and the next months there is a small interest charge (sometimes as low as $2).

Chase also does that.

I don't know how this works, if my balance is zero what I am paying an interest for?

[simplynoir]

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@Anonymous wrote:

I think @gdale6 is referring to this: Double-Cycle Billing Definition (investopedia.com)

Banned in 2009 so it would be surprising if it was still explicitly used

ETA: oh, looks like it WAS trailing interest, which is certainly legal

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Not all credit card companies do it but BofA is one of them

[Anonymous]

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@CreditPacMan wrote:

Bank of America always does that to me. I PIF before the due date, and the next months there is a small interest charge (sometimes as low as $2).

Chase also does that.

I don't know how this works, if my balance is zero what I am paying an interest for?

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Let's say your statement is dated first of the month.    You carried some charges on your July bill and your Aug 1 statement is for $100.   You pay the bill in full Aug 5th say.    But the $100 covered interest (and purchases) up to Aug 1, and since Jul wasn't paid in full  daily interest (on average daily balance) continues to accrue up to the time payment is received later in Aug.  So your Sep statement will contain interest charges.  Since Aug is paid in full (so no extra interest is added)  paying the Sep charge in full stops the cycle

[dumaine]

Sounds like Residual Interest to me