Am I retarded because I cant understand CC charges

[LS21]

The previous amex statement (for month of Sept) I received showed a balance of 5000$
So I have 20 days from that to pay the balance. (end Oct 20th) So in that grace period I paid 3800$ (remainder 1200$)


Throughout the month the month October I charged another 5000$.

Today I receive statement for October spending. In it I show 6200$ current balance (5000+1200), but I also received a finance charge. The finance charge is calculated from "Average daily balance 6200".


Isnt this incorrect? Shouldnt the finance charge be assessed on either
a) the remainder balance (1200)
b) Septembers full balance (5000) because I did not pay fully in time
or c) True "average daily" balance of 1200+2500 (assuming constant increasing charge)

It seems like their average daily balance is actually the remainder, plus the MONTH-END of October, though all October charges shouldnt be due yet?

Im a little confused - never had finance charged before.

 

[tasmanian]

I think the problem is your speanding $5000 a month with credit cards.

 

[LS21]

Originally posted by: tasmanian
I think the problem is your speanding $5000 a month with credit cards.

mostly travel spending. work owes me anywhere from 5000-10000$ at all times in reimbursement expenses. and they had a mini vacation during hurricane ike that further postponed my payout

 

[randomlinh]

read your fine print. it tells you how your avg daily balance is calculated

 

[Sphexi]

Read your T&C. You had until a certain date to pay off the full $5000, you didn't. Probably says that if you don't then you owe interest on the entire balance come the next due date.

 

[waffleironhead]

any time you carry a balance you lose any grace period....

 

[spidey07]

Originally posted by: randomlinh
read your fine print. it tells you how your avg daily balance is calculated

This. It's all in your member agreement in print for you to read. How it is calculated varies.

 

[LS21]

cockwaffles. well thanks. this is not a charge card. i thought there was a uniform standard across all (or most) credit cards.

http://home3.americanexpress.c...consumerinfo/grace.asp

A card with a typical grace period...

* Has an average daily balance including new purchases as the balance calculation method. This means you pay interest on all new purchases immediately, unless you have paid your previous month's bill in full.

A card with a full grace period...

* Has an average daily balance excluding new purchases as the balance calculation method. New purchases are not included in figuring the amount of interest you owe for the current month. Unlike the typical grace period described above, you get the benefit of the grace period, whether or not you paid off your balance in full the previous month.

A card with no grace period...

* Has average daily balance including new purchases as the balance calculation method. However, with this card, you will always pay interest immediately on new purchases, whether or not you have paid your credit card bill in full the previous month.