Credit Card Interest Accrual

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chuckwalla
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Credit Card Interest Accrual

Post by chuckwalla »

If one pays off their credit card bill each month, but say they forget to pay on time one time, thereby triggering interest which will appear on next month's bill. If they pay off that next month's bill but keep making purchases in the meantime, will it stop the interest as of that month?

Or, since the interest started getting tacked on, do they have to stop using that card for a month to completely zero out the account balance in order to stop the interest?
hunoraut
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Re: Credit Card Interest Accrual

Post by hunoraut »

Before i started using auto-pay, i would occasionally forget the due date.

Everytime, i would call up the card issuer, say ‘whoops i forgot the deadline’, and they’d say ‘yeah i can see you always pay on time dont worry about it we’ll waive all the penalties/fees’.

To my recollection ive never paid a cent of CC interest or penalty in my life, and the credit reports when they show the ontime/delinquency table its green across the board.

If that was the nature of your question, i would say theres nothing to worry about.
Topic Author
chuckwalla
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Re: Credit Card Interest Accrual

Post by chuckwalla »

Let's say it's past that stage, and they can't avoid the interest and late fees.
syngameon
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Re: Credit Card Interest Accrual

Post by syngameon »

The bank will charge you interest on the amount that was carried over from the last statement. Call the bank and ask what the correct payoff amount is that day and then pay an extra $1 on top of it that day. After that, set up autopay so you never forget.
lazydavid
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Re: Credit Card Interest Accrual

Post by lazydavid »

Yep, you have to pay off the most recent statement balance, plus any interest and fees that have accrued in the interim. The CC company can tell you what that amount is.

Charges after the statement close are still in their grace period and not accruing additional interest yet.
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ResearchMed
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Re: Credit Card Interest Accrual

Post by ResearchMed »

syngameon wrote: Mon Apr 01, 2024 1:48 pm The bank will charge you interest on the amount that was carried over from the last statement. Call the bank and ask what the correct payoff amount is that day and then pay an extra $1 on top of it that day. After that, set up autopay so you never forget.

I'd add more than an extra dollar unless you are sure you haven't recently used the card at all. That's in case there is a charge that is right in the middle of posting... and then you'll be right back in the same loop again.

The way 'new charges' are handled in these cases doesn't seem reasonable, but that's not among the criteria for selecting the terms and conditions, and I'm sure that the total "extra" that the charge card vendors collect from this... really adds up over time!
:annoyed

RM
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fulltilt
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Re: Credit Card Interest Accrual

Post by fulltilt »

chuckwalla wrote: Mon Apr 01, 2024 12:53 pm If one pays off their credit card bill each month, but say they forget to pay on time one time, thereby triggering interest which will appear on next month's bill. If they pay off that next month's bill but keep making purchases in the meantime, will it stop the interest as of that month?

Or, since the interest started getting tacked on, do they have to stop using that card for a month to completely zero out the account balance in order to stop the interest?
You’ll have to read your cardholder agreement.

At least one credit card out there requires you to pay your balance in full for *two* consecutive cycles to regain your grace period.
Walk a single path, becoming neither cocky with victory nor broken with defeat, without forgetting caution when all is quiet or becoming frightened when danger threatens. -- Jigoro Kano
fulltilt
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Re: Credit Card Interest Accrual

Post by fulltilt »

lazydavid wrote: Mon Apr 01, 2024 1:57 pm Yep, you have to pay off the most recent statement balance, plus any interest and fees that have accrued in the interim. The CC company can tell you what that amount is.

Charges after the statement close are still in their grace period and not accruing additional interest yet.
I doubt that is true.
Walk a single path, becoming neither cocky with victory nor broken with defeat, without forgetting caution when all is quiet or becoming frightened when danger threatens. -- Jigoro Kano
lazydavid
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Re: Credit Card Interest Accrual

Post by lazydavid »

fulltilt wrote: Mon Apr 01, 2024 5:57 pm
lazydavid wrote: Mon Apr 01, 2024 1:57 pm Yep, you have to pay off the most recent statement balance, plus any interest and fees that have accrued in the interim. The CC company can tell you what that amount is.

Charges after the statement close are still in their grace period and not accruing additional interest yet.
I doubt that is true.
Seems you are right for my AmEx, which uses the term "Total new balance" in that clause. But my Citi is as I described "statement balance".

So I guess it comes down to--check with your specific card issuer.
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chuckwalla
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Re: Credit Card Interest Accrual

Post by chuckwalla »

So I guess even if you pay off the new total balance which includes all the purchases up to that point plus interest and fees, one really should not be making any new purchases until the closing date for that second month.
lazydavid
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Re: Credit Card Interest Accrual

Post by lazydavid »

chuckwalla wrote: Tue Apr 02, 2024 10:12 am So I guess even if you pay off the new total balance which includes all the purchases up to that point plus interest and fees, one really should not be making any new purchases until the closing date for that second month.
Even on my more restrictive AmEx, if you pay it to current (zero total balance, no outstanding fees or interest), new charges after that point will not incur interest.
fulltilt
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Re: Credit Card Interest Accrual

Post by fulltilt »

lazydavid wrote: Tue Apr 02, 2024 7:20 am
fulltilt wrote: Mon Apr 01, 2024 5:57 pm
lazydavid wrote: Mon Apr 01, 2024 1:57 pm Yep, you have to pay off the most recent statement balance, plus any interest and fees that have accrued in the interim. The CC company can tell you what that amount is.

Charges after the statement close are still in their grace period and not accruing additional interest yet.
I doubt that is true.
Seems you are right for my AmEx, which uses the term "Total new balance" in that clause. But my Citi is as I described "statement balance".

So I guess it comes down to--check with your specific card issuer.
Totally agree.

The Costco VISA card does not work the way a person might expect:

"Grace Period on Purchases. You won’t pay any interest on Purchases if you pay the New Balance, including any Balance Transfers, in full by the payment due date shown on your statement each Billing Period. We call this a grace period on purchases. If you don’t pay your New Balance, including any Balance Transfers, in full by the payment due date in a Billing Period, you’ll pay interest on your Purchases from the date they’re posted to your Account. You also won’t have a grace period on Purchases again until you pay the New Balance in full by the payment due date 2 Billing Periods in a row."

Ouch.
Walk a single path, becoming neither cocky with victory nor broken with defeat, without forgetting caution when all is quiet or becoming frightened when danger threatens. -- Jigoro Kano
Outafter20
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Re: Credit Card Interest Accrual

Post by Outafter20 »

I was wondering the same thing. I have two capital one cards and last month I mixed up both payments and the payment on one card was missed. I found out about it the day after and a $25 late fee was added. I called up and got it waived and made the online payment (in full) which arrived two days after the due date, but before the bill closing date. When the bill was cut for that card there was a $9.04 interest charge which I never called to get waived. I hope interest doesn't accrue on this months purchases because I paid my annual homeowner's and Auto insurance on with the card. :oops: :oops:
funxional
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Re: Credit Card Interest Accrual

Post by funxional »

Outafter20 wrote: Tue Apr 02, 2024 7:18 pm I was wondering the same thing. I have two capital one cards and last month I mixed up both payments and the payment on one card was missed. I found out about it the day after and a $25 late fee was added. I called up and got it waived and made the online payment (in full) which arrived two days after the due date, but before the bill closing date. When the bill was cut for that card there was a $9.04 interest charge which I never called to get waived. I hope interest doesn't accrue on this months purchases because I paid my annual homeowner's and Auto insurance on with the card. :oops: :oops:
You can minimize the interest charges by paying out of cycle rather than waiting for the bill. For that amount it's worth calling to check and making the payment if needed.
Outafter20
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Re: Credit Card Interest Accrual

Post by Outafter20 »

funxional wrote: Sat Apr 06, 2024 12:24 pm
Outafter20 wrote: Tue Apr 02, 2024 7:18 pm I was wondering the same thing. I have two capital one cards and last month I mixed up both payments and the payment on one card was missed. I found out about it the day after and a $25 late fee was added. I called up and got it waived and made the online payment (in full) which arrived two days after the due date, but before the bill closing date. When the bill was cut for that card there was a $9.04 interest charge which I never called to get waived. I hope interest doesn't accrue on this months purchases because I paid my annual homeowner's and Auto insurance on with the card. :oops: :oops:
You can minimize the interest charges by paying out of cycle rather than waiting for the bill. For that amount it's worth calling to check and making the payment if needed.
I did call. The rep I spoke with couldn't tell me if there would be any training interest due but did note my account and seemed confident that it could be removed if any interest posts. She also credited me back the $9.04 interest :sharebeer . The payment was made before the statement cut off, just after the due date so hopefully there is no trailing interest but I'll find out when my statement cuts of on 4/10.
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whodidntante
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Re: Credit Card Interest Accrual

Post by whodidntante »

It's much better to use autopay on every card, and to keep an eye out for fraudulent transactions using an aggregator. One corner case is that it is not ideal if there is a dispute, but there is no guarantee you will win a dispute anyway.
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