Interest Charges

[LRiv3277]

Jurisdiction

New York

Good afternoon, I am having a problem with a credit card I have. I make charges to it and pay it off in full before the next billing cycle but I am still being charged interest on that amount even though I'm paying the first billing amount in full! When I called to ask about this their response was:
"Whenever your statement balance is not paid in full by the 7:00 pm ET cut off time on your due date shown on your statements, you are assessed a finance charge, which accrues based on the average daily balance. Additionally, unlike purchases, balance transfers and cash advance transactions have no grace period and will accrue interest once they have posted to the account." - I make the payment before the due date. Isn't the law that interest gets charged if the full amount due is not paid by that first bills due date? Please help, this happens every time I use the card and I feel like I should close the account but don't want it to negatively impact my credit. Thank you.

 

[zddoodah]

Isn't the law that interest gets charged if the full amount due is not paid by that first bills due date?

This isn't a matter of law; it's a matter of contract. Read your credit card agreement.

At the end of the day, if your credit card issuer isn't dealing with you in a way that makes you happy, close the account and get a different card.

Not sure if you're saying that you're concerned about closing the account impacting your credit, but I doubt that would happen.

 

[LRiv3277]

Thank you - and you're correct, I actually went into the contract and reviewed and I see why they are charging me interest. In he contract it states the bill must be paid in full before the end of the billing cycle, so although the purchase was new and there was no minimum due, the billing cycle ended prior to my payment therefore accruing interest. Thank you for taking the time to respond.

 

[mightymoose]

Now that you understand the problem perhaps you can avoid interest in the future.

It is generally not a good idea to close the account. Doing so does effect your credit scores. It is not anything negative, but available credit favorites into the calculation. It is better to leave the account with available credit open and destroy the card, or otherwise just not use it.