The Motley Fool Discussion Boards

Previous Page

Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: The Power Of Compounding Date:  2/6/2013  11:55 AM
Author:  vkg Number:  306769 of 312188

I'm sorry, I just don't remember this when we carried a balance.

And they said the disclosure was a change...

I don't know of any credit card that has a grace period when carrying a balance. Maybe they didn't add the current interest charges into the daily balance calculations for interest charges.

If it is a change, then it would increase interest charges. Assuming that the payment is always a month after the close of the billing cycle, the additional interest would be
Average Balance * (1/12 interest rate) * Interest rate.

For most customers that carry a balance, the difference will be small.

Annual difference per $1,000 with 12% interest

$1,000 * 1% * 12% = $1.20

Even this amount should be decreased by paying early in the billing cycle.

When carrying a balance, there is no grace period. The primary concern should be the eliminating the balance.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us