I have four credit cards, including a Citibank Double Cash, and almost always pay when I receive the statement. When I got my statement last month I noticed I had somehow underpaid my balance by $53, yet was charged $10+ dollars in interest. Since the interest rate was 23%, this seemed kind of high for a $53 balance, so I called the bank to ask how they calculate the interest.
I found out, which I did not know cause who has time to read all the literature they send out, that they calculate the balance based on the average daily balance, not the $53 I was in arrears. The average daily balance was 10x the underpayment, which is why the interest was much higher than I thought.
Like I said I rarely pay interest, so it was an eye opener for me. Do all the credit card companies do it this way?
as of 1/1/23
