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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308557  
Subject: Re: The Power Of Compounding Date: 2/6/2013 11:55 AM
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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.
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