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When is interest charged on a credit card?

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hernaemm90
New Contributor

When is interest charged on a credit card?

I got into a discussion with someone about when interest is charged on a credit card because we disagreed. So, I went and read my cardholder agreements to confirm what I belived, interest is charged from the date of purchase and interest is waived when you pay your statement balance in full. Below are screenshots of cardholder agreements from Discover, Bank of America, and Capital One, they all spell out clearly that it is as I thought

 

Discover Cardholder agreement.PNG

 

Bank of America Cardholder agreement.PNG

 

CapitalOne Cardholder agreement.PNG

 

However, I'm not 100% percent confident in the language from Chase and American Express. Screenshots below

 

Chase Cardholder agreement.PNGAmerican Express Cardholder agreement.PNG

 

I've read and re-read them and i'm 99% percent sure that it works the same way as my other card. When Chase and American Express say "Your account enters and interest free period when you pay your new balance", I take that to mean that if you don't pay your new balance in full by the due date, you don't enter an interest free period, and thus, pay interest on the entire balance from the date of purchase.

 

For example, if I were to open a new credit card with Chase or American Express today, spend $1,000 in the first billing cycle, and only pay $500 by the due date, then I never enter an interest free period. At least, that's how I read it.

 

How would you guys interpret this? Are there any contract lawyers on this forum? lol. If you think i'm wrong and leave a reply, would you try to explain your line of thinking to me?

3 REPLIES 3
mgood
Valued Contributor

Re: When is interest charged on a credit card?


@hernaemm90 wrote:

So, I went and read my cardholder agreements to confirm what I belived, interest is charged from the date of purchase and interest is waived when you pay your statement balance in full.


That's the way I understand it.



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Remedios
Credit Mentor

Re: When is interest charged on a credit card?

That would be correct.

If statement balance is paid in full by due date, there are no additional interest charges.

If one makes partial payment, remaining amount is subject to interest accrual, and interest is calculated from the day charge posts. 

Message 3 of 4
sznthescore
Established Contributor

Re: When is interest charged on a credit card?

Learn something new everyday.... which explains the questionable interest I was being charged on my Apple Card. Makes sense now... ✍🏽 

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