When does Interest Start on a CC?

wtfcreditcard · #1 (**permalink**) 04-10-2010, 01:50 PM

I have my first credit card... Let's say I have $100 charged up at a 10% fixed APR. When my first bill comes due (let's say it's due 07/01/2010) and I pay ALL it before then...

When does the interest start??? Am I being charged interest from the date of transaction, or is it on the amount I haven't paid by the due date?

Is this a true statement: If I only pay $50 (above the $10 minimum payment) before the bill is due... I'm being charged 10% APR on the $50 balance... yes???

Last question, will Obama's changes change ANY of the above? Thank you.

Piedmont · #2 (**permalink**) 05-14-2010, 12:52 PM

Interest "starts" when you don't pay the "balance due". As long as you keep paying that "balance due" each month, interest will never start. Feel free to charge everything, just pay the balance due on your bill (even if you know you made more recent charges) and interest will not start.

If the balance due says $100 and you pay $50... the remaining $50 starts collecting a daily interest AND any new purchases immediately collects daily interest as well so it's best not to use the credit card.

As a tip, if that happens you have to pay MORE than the balance due to stop it because... that balance due they said on your bill was a week ago and it's been collecting daily interest so to pay it off you need to pay more. In this situation I not only pay more than is due but also don't use it for a month to be sure. It's like a reset, afterward one can charge everything again without paying interest until the next time you can't pay off the full balance. Then it's rinse and repeat.

I don't know how the Obama rules have changed this.

investor123 · #3 (**permalink**) 05-29-2010, 01:31 AM

I agree with Piedmont, it starts on the day after you missed the due date for your balance.

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