After carrying a balance for several months, we paid my wife’s credit card balance in full last month. It was quite a relief. Except that the new statement comes today and we owe a balance of $4.85. I scratched me head and my wife called the company (Citibank). She’s had her card for many years and has typically paid the balance in full for most of it. Anyway, the slightly crabby customer service rep explains that even though we paid the indicated balance in full last month there is a daily-accrued finance charge that must be paid as well, and that always runs one month behind. I suppose that makes sense but it seems a little slimy-business-dealy to me. What says the teeming millions?
Strange. I just paid off four Credit Cards recently. The balances were up in the couple thousand each. The following month, two cards still had balances of like 12 dollars or something. I called the Service Reps and they had no problem just deleting those silly finance charges.
Your rep wouldn’t do that? Both cards that had a balance after payoff had no problem with deleting that extra balance.
That’s what I thought would happen, but the customer service rep we talked to didn’t offer and I just didn’t ask. I might ask my wife to call back and ask about that. I think I might have just asked that straight away if I had called, but my wife has a different style.
Hmm. Thanks for the info.
Did you have a cash advance anywhere in there? They may accrue interest daily (rather than monthly), so continue to pile up charges even when the principal is paid.
Not saying this is true in your case, but I took one years ago and had a helluva time getting it cleared—I had to call the credit union to get that day’s balance, then go straight in and pay it off.
I got caught like this with a cash advance. Otherwise, my response would be, “Cancel it or I cancel the card.”
In all the years I’ve had credit cards, I’ve only carried a balance once or twice, and other than those times, I’ve never paid a penny in finance charges. If you pay off the balance, you shouldn’t be paying charges. If the company insists on charging you, cancel the card and get a decent one.
Most credit card agreements specify that the finance charges are computed on some sort of average daily balance owed. In its simplest form, (and I know this doesn’t sound simple at all 
), they take the amount owed each day of the billing period and divide by the number of days in the billing period, and then multiply the result by the daily periodic finance charge by the number of days in the billing period. Or something.
The only general exception is if the prior bill was paid in full, so that there is in effect a zero amount average daily balance.
What they are charging you is the amount of interest on the previous balance due from the date of the statement until the date they recorded the payment.
Yes, it’s a definite feeling of FU after finally getting out of their grip, and yes, they might rebate it if you ask nicely, but my guess is it’s perfectly explained in the gobbledygook of the finance agreement.
Merhouse has this right.
Most credit cards have interest computed on the average daily balance method, and the interest is charged in such a way that the amount shown on your bill may not be the total amount of interest that has accrued by the time your check is recieved (the bill will show that interest that has accrued up to the day the bill is printed, not up until the due date). Most lenders will suggest that you call before sending in a payoff check to make sure you cover the full amount of interest that has accrued.
So, for example, you get a bill on 3/15 for $1000, so you send a $1000 check that arrives on 4/1. From 3/16 to 3/31, that $1000 was still accruing interest and you will be billed for that amount.
This is one of the reasons most cards will have a 30-day grace period before interest accrues if you start the billing period with no balance – so you can pay the amount on the bill every month and always be paid off.
Chase did this to me. They kept charging me interest on the days till I paid in full. Of course this meant, in theory I’d never pay it off. Funny thing is I paid the balance in full in Nov of 2005 and to this day I STILL get a bill saying I’m required to pay $00.00
Credit cards are very tricky you really need to read the fine print
You might also check if your card has two “due” dates. I had a card that had a “payment due” date and an “interest-free due date”. The payment due date was the one where the payment was in time to be posted for the next statement (after which it was considered late). The interest-free date was about 5 days earlier, and the balance had to be paid by then to avoid being charged interest.
So with this card, you could pay in full “on time” and still get charged interest.
Zero,
Go ahead and send Chase a check for $00.00. That’ll shut 'em up!!!
Guess what? They’re all starting to play this game more and more. Beware! All MBNA cards (#1 Bank for credit cards) do this which has recently been bought up by Bank of America. I had the same crap from Capital One. They wanted me to call for a pay-off balance, but even still…they never gave me a window in which to mail in my balance…so it never ends!
More bad news: I don’t know why this is legal, but credit card laws go by the state in which the bank operates, not by the states they serve. So, your own state laws won’t protect you.
We simply paid-up and told them to cancel it. I think we paid slightly extra to assure the damn card would die. I mean, not even silver bullets could kill the thing, otherwise!
Credit cards - handed out like candy by the bastards who run an evil candy shop.
- Jinx
Unfortunately, states no longer have any significant control over credit card companies. The CC companies got Congress to pass Federal laws in their favor, the US courts have ruled that the Federal laws override the state laws. There is a commission to “oversee” the CC companies to prevent its abuses but it’s just a show.
There was a “Frontline” episode about this recently.
Sounds smarmy to me to. Try calling during off hours in the hope of gettig a different Cust. serv. Rep. and ask for detailed explanation for the charge, what triggered it etc. If not fully explained ask for the CSR’s supervisor. Keep detailed notes and be prepared to document everything in writing.
Once resolved , get a Visa or MC.
Wait for a zero bal. due and jettison Citibank.
I love my particular Citibank card. Back when I used to get paper statements, there was always a line that said something about “no interest being due if payment received before xxx date.” They don’t do that any more?
In any case, Citibank has a great, easy-to-use online bill paying system that you could use, too, and then there’s no silly “window” to worry about mail times and checks clearing and all of that.
The key you seemed to mention, though, was that there had been a balance carried over, and hence you have daily interest. You have a grace period without interest only on new charges. Of course your payments are always credited first the the oldest of purchases (not cash advances) and then to new purchases, and then cash advances. So that whole grace period probably just didn’t apply to you (oh, and no grace on advances).