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Top Question:
How are interest charges on my credit card statement calculated?
Best Answer:

We calculate your Interest Charges each billing cycle by using the Average Daily Balance (including new transactions) method. We do this separately for each balance category on your Account (e.g. Purchases, Balance Transfers, Cash Advances, and each promotional balance). For each balance category, to determine the Average Daily Balance, we must first calculate the daily balance. 

We calculate your Interest Charges each billing cycle by using the Average Daily Balance (including new transactions) method.  We do this separately for each balance category on your Account (e.g. Purchases, Balance Transfers, Cash Advances, and each promotional balance).  For each balance category, to determine the Average Daily Balance, we must first calculate the daily balance. 

To calculate the daily balance, we will:

  • take the beginning balance of that balance category each day (any credit balance is treated as a zero balance); then
  • add any new transactions of that type that occurred on that day; then
  • subtract the applicable portion of any payments or credits; then
  • subtract any unpaid Fees that have posted to that balance category during the billing cycle; then
  • subtract any unpaid interest that may have been charged to you for transactions in that balance category.

Then, to calculate your Average Daily Balance, we will:

  • add up all the daily balances for the billing cycle; then
  • divide the total by the number of days in the billing cycle.

If a transaction occurred before the start of a new billing cycle but posts afterwards, we will include that transaction on the first day’s transactions of the new billing cycle.

Interest Charges begin to accrue on Purchases, Balance Transfers, and Cash Advances on the transaction date, and will continue to accrue until you pay the entire New Balance in full.  The Interest Charges that accrue up to that billing cycle’s statement closing date will be shown on the Monthly Periodic Statement for that billing cycle. To calculate Interest Charges each billing cycle, we will:

  • determine your monthly periodic rate (“MPR”) by dividing the applicable APR by 12; then
  • multiply the Average Daily Balance for that balance category by the MPR.

You may have an interest-free period (“Grace Period”) to repay your balance for Purchases before Interest Charges are imposed. 

We will not charge you interest on new Purchases when:

  • your New Balance shown on your Monthly Periodic Statement for the previous billing cycle is paid in full by the Payment Due Date;
  • your Previous Balance is zero; or
  • your Previous Balance is a credit balance.

If none of these conditions occur, Interest Charges will be imposed on Purchases from the date they are posted to your Account.  The next time you pay your entire New Balance in full by the Payment Due Date, the Grace Period will apply to new Purchases in the billing cycle they are made.  The next billing cycle in which you pay your entire New Balance in full by the Payment Due Date, the Grace Period will again apply to Purchases. The Grace Period applies to Purchases only.  There is no Grace Period for Cash Advances and Balance Transfers. There is no time period within which to repay Cash Advances or Balance Transfers without incurring Interest Charges.

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