Posts Tagged ‘Creditor’

Double Billing Cycle

One of the ways creditors compute finance charges is the double billing cycle method. This is one of the most costly ways your finance charge can be calculated. How it Works To calculate your finance charge, the creditor uses your average daily balance for the current and previous billing cycles. Let’s assume you have a balance of $500 with an APR of 11.9%. If you make a $200 payment at the end of the month, using the average daily balance method, your finance charge would be calculated like this: (Average Daily Balance * APR * Days In Billing Cycle)… Read the whole article...