What does promotional balance mean?
This kind of promotional plan means you will make minimum required payments for six months and interest will not accrue.
If you pay the balance in full before the six-month promotional period expires, you will not have to pay interest on that purchase..
What is balance subject to interest?
The Balances Subject to Interest Rate for each type of transaction shown on your billing statement is the sum of the daily balances for that type of transaction divided by the number of days in the billing cycle.
What happens when interest free period ends?
Depending on the card, this special interest rate will apply to purchases, transferred balances or both. Once this period is over, you’ll be charged a new interest rate and will owe interest on any unpaid balance on the card. Card issuers offer these promotional rates to encourage new card signups.
Why am I charged interest after paying off credit card?
Have you ever received a credit card bill for finance charges the month after you thought you paid the balance off in full? … Residual interest, also known as ‘trailing interest’, is the interest charged on a credit card balance that accumulates between the billing statement date and the date you pay the bill.
How is interest calculated monthly?
To calculate the monthly interest, simply divide the annual interest rate by 12 months. The resulting monthly interest rate is 0.417%. The total number of periods is calculated by multiplying the number of years by 12 months since the interest is compounding at a monthly rate.
How do I pay off promotional balance?
If you want your extra payments to go toward your promotional balance so that you can pay it off within the promotional time period, you can ask your credit card company to apply anything you pay above the minimum monthly payment amount to your deferred interest balance.