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How is my interest calculated?

Regular Contributor

How is my interest calculated?

I was just going through my February BofA credit card statement and I realized that the interest that was charged was a bit more than it should have been. I am not a big math guy and may be that's why I was having a hard time understandiong it. 


Balance: 14,121.93

Promotional APR of 0% on: $10,354.48  (Direct deposit)

So shouldn't I be charged interest only on the remaining purchase balance of 3,767.45?


Here is an image of BofA's interest charge calculation and account summary. 


Thank you for your help Smiley Happy




Re: How is my interest calculated?

You are charged interest based on your daily balance through the statement cycle, not the balance at statement close.  Also keep in mind that your minimum payment amount is applied to the 0% promotional APR rather than to new purchases.  As you have no grace period, keep in mind that new purchases begin to accrue interest immediately upon purchase, so depending on the timing of your purchase and the payment being applied, you could be paying as much as 4% in interest even if you are paying the full amount of new purchases off, easily offsetting any rewards earned for the purchase.

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Valued Contributor

Re: How is my interest calculated?

Credit card companies use the average daily balance method for charging interest so without knowing when payments and purchases were made it is impossible to tell 

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