Credit Card Charges

Parent Cafe
1

<p>I know I should have known better, but I guess I wasn’t thinking.</p>

<p>During October, we charged a family cruise for a number of people. Most of the charge was ours, but a few other family members had to pay us back. We charged it because we went through Costco and you had to be a member to go through them. The savings was worth it.</p>

<p>Anyway, the bill came on our American Express card which was due on November 6. Almost everybody had paid us back and we had the money to pay except for about $1000. Since we had just paid our own portion of that, we would not have the money to pay the entire bill without taking money out of savings. The family member who still owed us didn’t have it and they are young and I didn’t want to bug them for it. They have since paid us.</p>

<p>So I figured that I would pay the entire bill except for the $1000 since I figured the interest charge on that would be maybe 2% or so? The interest on our card is 15% annually and this would be for only a month. I also figured that since our amexcard pays us 2% on travel that we would come out even. </p>

<p>So I was SO surprised to get our next month’s bill and find that the finance charge was $95.31. They charged us on the average daily balance, not the balance due. </p>

<p>I know I should have known better, but we always pay our credit card bills in full every month so have not dealth with this before. Seems a big rip off to me. </p>

<p>What do you guys think?</p>

2

<p>call them and ask for an adjustment. If you have never called for one, they might give it if you explain.</p>

3

<p>Apparently we are supposed to read all those fine print notices they keep sending.
Who Knew?</p>

<p>I would double check that avg daily balance is a new thing for your account, it is pretty common I think.</p>

<p>[Credit</a> card companies raise rates and fees while they still can before the credit card act goes into effect February](<a href=“http://www.ledger-enquirer.com/news/story/893641.html]Credit”>http://www.ledger-enquirer.com/news/story/893641.html)</p>

<p>

</p>

4

<p>Sounds like you had money in savings but didn’t want to use that. If your savings account is like mine, it is earning a whooping 0.8%. In hindsight, the better move would have been to use the $1000 from your savings and replace it when you were repaid.</p>

5

<p>Let me say that I think credit card companies are a bunch of usurious crooks that will take any opportunity to screw you out of dime. However, the deal is if you pay the loan off by the due date you (the customer) actually get a free loan due to that grace period. If you don’t pay it off on time, they charge interest on the average daily balance. Think about what happens if your full payment gets there on the due date (no charges) vs 1 day later (interest on the entire balance). That’s the way it works, and the average daily balance business, while a shock to you if you weren’t expecting it, is not really one of their greater ripoffs in my opinion.</p>

6

<p>Most credit card companies calculate the interest based on the average daily balance. I highly doubt they will make an adjustment, but who knows.</p>

7

<p>I totally agree that I should have known and believe it, it won’t happen again. I guess I was just surprised and wondered how many people realized this. </p>

<p>

Absolutely. This was a dumb thing to do. I guess the surprising thing to me is that had I made only the minimum payment on the $9K balance or paid everything but $10, the finance charge would have been the same. Seems weird.</p>

8

<p>I have never paid interest, so I am not sure, but you may get hit with an interest charge this month also, since you had a previous balance. (Something about two cycle billing?) You may need to pay it off immediately rather than let it ride until your next due date.</p>