The issuer totals the beginning balance for each day in the billing period and subtracts any credits made to your account that day. Cash advances are typically added to the balance. The resulting daily balances are added for the billing cycle then divided by the number of days in the billing period to get the average. The issuer subtracts payments or credits received during the current billing period from the balance at the end of the previous billing period. Any purchases made during the billing period aren't included.
Some issuers also exclude prior unpaid finance charges from the previous balance.
This method gives you until the end of the billing cycle to pay on your balance in order to avoid finance charges. This is the amount you owed at the end of the previous billing period. Payments, credits and new purchases during the current period are not included. Some issuers also don't include unpaid finance charges. All Rights Reserved.