@ngerasimatos wrote:I am very confused about statement dates, due dates, and finance charges. If I buy something, lets say on the 5th of a month, when does that purchase amount start to accrue interest? Here is my situation: example below.
PURCHASE A $400 - COMPLETED MAY 5TH
PURCHASE B $100 - COMPLETED MAY 11TH
PURCHASE C $25 - COMPLETED MAY 14TH
PAYMENT $500 - COMPLETED MAY 21ST
PAYMENT DUE DATE - MAY 25TH
Using the dates in the example, I've got to figure that the statement closing date for that account is around the 1st of the month. Your statement should indicate exactly when it is. I'll assume it is May 1st for this example.
If you had a zero balance on May 1, and you had paid your previous balance in full on or before its April 25th due date, no payment would be due by May 25th. Whatever payments and charges you make between May 1st and June 1st will appear on your June 1st statement, and at least the minimum payment will be due on June 25th.
If the balance is NOT paid by June 25th, charges accrue interest from the day it was first posted to your account. The interest is added to your account's current balance on July 1st (when the next statement closes).
If any statement's balance is not paid in full by the due date, you will be charged interest, as well as interest on all future purchases, right from the time charges first post, until you once again have paid your statement balance in full by the due date.
In your example, and assuming the zero starting balance, with all of the charges occurring in the May 1 - June 1 cycle, your payment of $500 will leave a $25 balance (which is what will be reported to the CRA when the statement actually closes on June 1st), plus/minus any additional charges/payments you make on or before June 1st.
If you pay that statement balance in full by June 25th, you avoid paying any interest, not only for anything on that bill, but you retain the grace period for purchases in the June 1 - July 1 billing cycle.
Whew! Clear as mud, right? 
P.S. To confuse you further, when you do finally pay a statement in full after having carried a balance on previous statements, it usually takes two statements to totally clear off any interest. The cccs will continue to charge interest on your balance from the moment they issue the statement to the moment you actually pay it in full, but they won't tack on that additional interest until the end of the following month's cycle.
WARNING: iF YOU HAD BEEN CARRYING A BALANCE, BUT YOU PAID IT IN FULL BY THE DUE DATE THIS MONTH, DON'T ASSUME YOU NOW OWE NOTHING!! You will owe interest (as stated above) which will not appear until the new statement cuts. The credit card companies get people with this one all the time. DO NOT BE ONE OF THOSE PEOPLE.
P.P.S. You know, this is confusing. It took me six edits (at least) to get this right, and I'm still not sure I've got it down correctly!
@Anonymous wrote:
@ngerasimatos wrote:I am very confused about statement dates, due dates, and finance charges. If I buy something, lets say on the 5th of a month, when does that purchase amount start to accrue interest? Here is my situation: example below.
PURCHASE A $400 - COMPLETED MAY 5TH
PURCHASE B $100 - COMPLETED MAY 11TH
PURCHASE C $25 - COMPLETED MAY 14TH
PAYMENT $500 - COMPLETED MAY 21ST
PAYMENT DUE DATE - MAY 25TH
Using the dates in the example, I've got to figure that the statement closing date for that account is around the 1st of the month. Your statement should indicate exactly when it is. I'll assume it is May 1st for this example.
If you had a zero balance on May 1, and you had paid your previous balance in full on or before its April 25th due date, no payment would be due by May 25th. Whatever payments and charges you make between May 1st and June 1st will appear on your June 1st statement, and at least the minimum payment will be due on June 25th.
If the balance is NOT paid by June 25th, charges accrue interest from the day it was first posted to your account. The interest is added to your account's current balance on July 1st (when the next statement closes).
If any statement's balance is not paid in full by the due date, you will be charged interest, as well as interest on all future purchases, right from the time charges first post, until you once again have paid your statement balance in full by the due date.
In your example, and assuming the zero starting balance, with all of the charges occurring in the May 1 - June 1 cycle, your payment of $500 will leave a $25 balance (which is what will be reported to the CRA when the statement actually closes on June 1st), plus/minus any additional charges/payments you make on or before June 1st.
If you pay that statement balance in full by June 25th, you avoid paying any interest, not only for anything on that bill, but you retain the grace period for purchases in the June 1 - July 1 billing cycle.
Whew! Clear as mud, right?
P.S. To confuse you further, when you do finally pay a statement in full after having carried a balance on previous statements, it usually takes two statements to totally clear off any interest. The cccs will continue to charge interest on your balance from the moment they issue the statement to the moment you actually pay it in full, but they won't tack on that additional interest until the end of the following month's cycle.
WARNING: iF YOU HAD BEEN CARRYING A BALANCE, BUT YOU PAID IT IN FULL BY THE DUE DATE THIS MONTH, DON'T ASSUME YOU NOW OWE NOTHING!! You will owe interest (as stated above) which will not appear until the new statement cuts. The credit card companies get people with this one all the time. DO NOT BE ONE OF THOSE PEOPLE.
P.P.S. You know, this is confusing. It took me six edits (at least) to get this right, and I'm still not sure I've got it down correctly!
If you let interest start accrueing, you have to read the Terms and Conditions carefully to know exactly how it starts and ends the interest accruals. They are not all the same.
But once you start accrueing interest, every purchase starts accrueing interest from the post date.
I hope that helps
@Anonymous wrote:If you let interest start accrueing, you have to read the Terms and Conditions carefully to know exactly how it starts and ends the interest accruals. They are not all the same.
But once you start accrueing interest, every purchase starts accrueing interest from the post date.
I hope that helps
Thank you, Wolf3!! (I've already given myself a headache trying to get through this one reply, and was afraid there'd be questions about two-cycle billing!)