“Stan” wrote:

Most charge based on the average balance for the month, so the earlier you pay, the less interest you are charged.”

I talked to a bank employee and found out it is ‘average daily balance’. She agreed that paying as much as possible as early as possible in the billing cycle would be less in interest.

The example we used was owing $1000 with a due date of the 30th and a minimum due of $50. If I paid $200 when I got my bill (and beginning of the billing cycle) on the 5th, my daily balance would be averaging around $800 +/-. If I waited until the due date of the 30th, my daily average balance would be closer to $1000…no matter what amount I paid on the due date.

What would the actual interest dollar amount be?…I have no clue! LOL but it has to be less paying it earlier than later.

The bank employee even told me her friend ‘accidently’ took money out of the ATM with the card and it was processed as a Cash Advance. She had to pay off her purchase balance before they started applying money to the cash advance. The amount grew larger due to interest being added to the original amount. That’s just the way this bank processes payments…purchases first…cash advances second.
Interest or amounts didn’t play into the picture.

Looking at it again, I guess it really doesn’t matter to US which balance they apply the payments to because the interest is the same on both. I could understand where someone else pointed out the large difference in their interest rates for purchases and cash advances and it would make a big difference.

I want to thank everyone again for helping me LEARN about this credit card stuff. I know everyone’s CC are not the same…but at least we’re talking about it and learning. Now…to teach the kids! (I think that’s going to be my new tag line!)