New purchases may or may not be added to the balance, depending on the plan, but cash advances typically are added. This is the most common method used by credit card issuers. This balance is computed by subtracting the payments you made and any credits you received during the present billing period from the balance you owed at the end of the previous billing period. New purchases that you made during the billing period are not included. Under the adjusted balance method, you have until the end of the billing cycle to pay part of your balance and you avoid the interest charges on that portion.
Some creditors exclude prior, unpaid finance charges from the previous balance.
The adjusted balance method usually is the most advantageous to card users. Previous Balance . As the name suggests, this balance is simply the amount that you owed at the end of the previous billing period. Payments, credits, or new purchases made during the current billing period are not taken into account. Some creditors also exclude unpaid finance charges in computing this balance.