Consumer complaint received 2025-01-25 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Fees or interest — Unexpected increase in interest rate
Company: NAVY FEDERAL CREDIT UNION
State: TX

Complaint narrative:
On XX/XX/2024 I received an email stating there are changes to my credit card agreement which would go into effect on XX/XX/2024. 

The summary stated that interest would be accrued and compounded differently. The email reads as follows : How We Calculate Your Interest Charges We use the daily balance method ( including new transactions ). We calculate the interest charges separately for each balance on your account subject to different terms ( for example, regular Purchases, regular Balance Transfers and Convenience Checks, regular Cash Advances, and each promotional balance ). We calculate daily interest on those balances by multiplying them by their DPRs. We do this each day of the billing cycle, and we sum the daily interest amounts to find the total monthly interest charge. Due to rounding, this calculation may vary slightly from the interest charged to your account.

For each balance, we calculate a daily balance by doing the following : Take the beginning balance that day ( the beginning balance for the first day of the billing cycle is the balance on the last day of the previous billing cycle ) ; Add any interest charge accrued on the previous days daily balance ( this is known as compounding interest ) ; Add any new transactions and fees as of the later of the transaction date or first day of the billing cycle in which the transaction or fee posts ; Subtract any new payments and credits applied to the balance ; and Make additional adjustments, as appropriate ( for example, adjustments for billing disputes ). 
If a daily balance is less than XXXX, we treat that daily balance as XXXX. 

Your Annual Percentage Rate ( APR ) for each balance on your account ( i.e., regular Purchases, regular Balance Transfers and Convenience Checks, and regular Cash Advances ) will not change, but their associated periodic rates will change to daily periodic rates ( DPRs ). Your DPR for each balance on your account is equal to the balances APR divided by XXXX. The APR for each balance on your account can be found on your periodic statement in the Interest Charge Calculation section. Below are examples of DPRs, based on a balances APR.

APR DPR ( APR divided by 365 ) 11.99 % 0.032849 % 15.90 % 0.043561 % 18.00 % 0.049315 % Paying Interest. We added a Paying Interest section to further explain when we start charging interest under the daily balance method as follows : Paying Interest Interest accrues daily and compounds daily on new transactions and unpaid balances from prior billing cycles. We start charging interest on all transactions, including fees, on the later of the date of the transaction or first day of the billing cycle in which the transaction posts. For Convenience Checks, the date of the transaction is the date the check posts to your Navy Federal Credit Card account. If you pay the New Balance that appears on your billing statement by the payment due date, you will not pay interest on Purchases. However, you can not avoid paying interest on Balance Transfers, Cash Advances, and Convenience Checks. Your due date is at least 25 days after the close of each billing cycle.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation