Credit Card Interest Question

13. Interest on cash advances, purchases and fees
We calculate interest on cash advances from the date of the cash advance
until the date we receive payment in full. There is no grace period for cash
advances. We don’t charge interest on purchases and fees appearing on
your account statement for the first time if you pay your new balance in
full within the grace period set out in your card carrier or in any notice we
provide to you.
If you don’t pay your new balance in full, interest charges on those
purchases and fees will appear on your next monthly statement. We will
charge interest retroactively from the date of the purchase or fee until the
date we receive payment in full.

14. How we calculate interest
The interest rates we charge are:
• the annual cash advance and purchase interest rates shown on the
card carrier or any notice we provide to you; or
• any promotional interest rates that we may provide to you.
Your account statement shows your annual and daily interest rates. If
you do not make a minimum payment by the due date two times in any
twelve month period, your interest rate will increase as shown on the card
carrier or any notice we provide to you. The amount of interest we charge
you on each account statement is calculated as follows:
• first, we determine your average daily balance by adding the interest
bearing amount you owe each day and dividing that total by the
number of days in the statement period
• next, we determine the daily interest rate by dividing the annual
interest rate by the number of days in a year.
Your interest charge is then calculated by multiplying the average daily
balance by the daily interest rate by the number of days in a statement
period. If different interest rates apply to categories of transactions (such
as purchases, cash advances, balance transfers), we calculate the interest
charge based on the average daily balance for each rate. Your account
statement shows the interest charges for each category. If your interest
rate changes during a statement period, we calculate interest using the
rate in effect at the end of that period. We add your interest charge to
your balance at the end of the statement period. As a result, we charge
interest on unpaid interest.

mmikeman wrote: ↑ Hey folks

Seeking some advice here, recently was off work for a few months to take care of a newborn child during this lovely pandemic. Before doing this I planned how to reduce borrowing and use savings to come out of my leave with a small amount of debt. Most of it went pretty well, CTFS card was able to buy myself 30-50 days to pay off hydro gas bills and my high spend cards I was able to afford paying off my entire statement, except I accidently made a mistake with BMO for 2 months and didn't pay back $200-$300 out of the $3000 I had spent, most credit cards you figure would charge you interest on that $200-$300 monthly until that plus the new balance is paid off? Looked at my BMO card bill and noticed a $45 interest charge....was surprised but quickly realized crap I didn't pay off a small amount of the balance, called BMO up and didn't ask for releif, simply just asked how their credit card interest works and the CSR advised me that with all their mastercards, if you don't pay the statement in full each month you will be charged interest ON YOUR AVERAGE MONTHLY BALANCE, does this seem common to anyone here?

I called CIBC and Amex to see if I was just stupid and they all work that way, those 2 lenders advised me I would have been charged interest only on the $200-$300 itself then next statement the total due would be the carried balance + new transactions. Didn't check any others yet

Do you think BMO may remove the interest still due to covid 19 is that discussion even worth a shot with them? I mean its only $90 for 2 months and my CB rewards on the card paid some of that nevertheless lesson learned dont carry ANY balance on BMO cards

Dynatos wrote: ↑ I don't know what's typical for how they calculate because I've fortunately never carried a balance,

coolintheshade wrote: ↑ You don’t need to carry a balance to understand how interest charges work.
You only need to read your cardholder agreements.