Credit Card Question - Tilted Forum Project Discussion Community

junglistic · 07-16-2004, 08:39 AM

I have kind of a weird question about the billing system used by credit card companies.

Ive got just a standard Visa Classic. Nothing special. When does the 'interest' start on a purcahse.

Directly 30 days after a purchase is made? Or is it at the end of the month?

Ie: I buy something on the 27th, if it is not paid off by the 31st, interest starts on the amount which hasnt been paid back?

Ive never had to pay interest in the 3 yrs of having the card, but I am considering putting a laptop on the card, and I want to know how long I will have before I am charged interest.

Thanks!

Trisk · 07-16-2004, 08:43 AM

I'm pretty sure interest isn't just a seperate fee. What they do instead is they give you monthly payments on an item that would be, let's say, $100. So over 12 months, you pay perhaps $10 for it each month...so by the time you pay off that one item, you ahve given them $20 interest.
How much interest depends on your plan and what type of card you have.

edmos1 · 07-16-2004, 08:44 AM

I would check the agreement, to see what sort of grace period they give you.

maleficent · 07-16-2004, 08:46 AM

Credit card answers from the Federal Reserve bank

It might differ from card to card, but it's the Grace Period that leaves you interest free.

The FRB had a pretty good defiition of the Grace period

Quote:

The grace period is the number of days between the statement date and the due date during which you can pay your bill without incurring a finance charge

Basically, if you want to but the laptop interest free - buy it on your statement closing date, and you've got 27 days or so to pay it off.

junglistic · 07-16-2004, 08:54 AM

Ok that does make sense. My statement date is at the end of the month.

I will call up to confirm exactly.

Thanks !

hrdwareguy · 07-16-2004, 09:01 AM

Most credit card companies give you a 25 day grace period to pay the bill. So interest should start accumulating on any outstanding balance on the card 25 days after the invoice date.

For example:
You buy a laptop on the 15th. The billing period ends on the 1st. Interest will start to accumulate on the 26th.

Stompy · 08-10-2004, 04:05 PM

Interest is calculated on what's remaining and not the entire bill, correct?

So if you bought something for $100 and interest was 20%, your first payment would have interest of $1.66 and you paid $21.66 to make the remaining balance $80.

Your next payment would only be $1.33 then, correct? (80 * .2 )/12 = 1.33

07-16-2004, 08:39 AM	#1 (permalink)
junglistic Insane	Credit Card Question I have kind of a weird question about the billing system used by credit card companies. Ive got just a standard Visa Classic. Nothing special. When does the 'interest' start on a purcahse. Directly 30 days after a purchase is made? Or is it at the end of the month? Ie: I buy something on the 27th, if it is not paid off by the 31st, interest starts on the amount which hasnt been paid back? Ive never had to pay interest in the 3 yrs of having the card, but I am considering putting a laptop on the card, and I want to know how long I will have before I am charged interest. Thanks!

07-16-2004, 09:01 AM	#6 (permalink)
hrdwareguy "Officer, I was in fear for my life" Location: Oklahoma City	Most credit card companies give you a 25 day grace period to pay the bill. So interest should start accumulating on any outstanding balance on the card 25 days after the invoice date. For example: You buy a laptop on the 15th. The billing period ends on the 1st. Interest will start to accumulate on the 26th. __________________ Gun Control is hitting what you aim at Aim for the TFP, Donate Today

08-10-2004, 04:05 PM	#7 (permalink)
Stompy Banned from being Banned Location: Donkey	Interest is calculated on what's remaining and not the entire bill, correct? So if you bought something for $100 and interest was 20%, your first payment would have interest of $1.66 and you paid $21.66 to make the remaining balance $80. Your next payment would only be $1.33 then, correct? (80 * .2 )/12 = 1.33 __________________ I love lamp.

07-16-2004, 08:43 AM	#2 (permalink)
Trisk Insane	I'm pretty sure interest isn't just a seperate fee. What they do instead is they give you monthly payments on an item that would be, let's say, $100. So over 12 months, you pay perhaps $10 for it each month...so by the time you pay off that one item, you ahve given them $20 interest. How much interest depends on your plan and what type of card you have.

07-16-2004, 08:44 AM	#3 (permalink)
edmos1 Daddy Location: Right next door to Hell	I would check the agreement, to see what sort of grace period they give you.

07-16-2004, 08:54 AM	#5 (permalink)
junglistic Insane	Ok that does make sense. My statement date is at the end of the month. I will call up to confirm exactly. Thanks !