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Massacure

(7,525 posts)
Sat Oct 17, 2015, 10:16 PM Oct 2015

Question about credit card interest charges

I have a question about how credit card interest charges work.

Long story short, my checking account ran low on cash at the end of July and I was expecting several electronic debits for bills. I transferred a couple of hundred dollars from my credit card to my checking account as a cash advance back to hold me over a couple of days while I did an ACH transaction from a high interest savings account at a credit union in a former city I used to live in.

I repaid the money a couple days later and then paid the card off in full as part of my normal payment cycle toward the end of August like I always do. I paid 70 some cents in interest on the cash advance, which was expected.

I paid my card off in full again toward the end of September, but I just noticed that on September 30 I was assessed 1 cent interest charge on a 69 cent average daily balance cash advance. I'm sitting here thinking to myself, "what the hell?"

I plan on calling the bank Monday and asking what's up, but can someone tell me what I might expect?

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Question about credit card interest charges (Original Post) Massacure Oct 2015 OP
Iirc, cash advances accrue interest from the moment you take them. MissB Oct 2015 #1
This is correct. OrwellwasRight Oct 2015 #3
I'd give you my 2 cents worth but I don't want to add such exorbitant charges to your woes pinboy3niner Oct 2015 #2

MissB

(15,811 posts)
1. Iirc, cash advances accrue interest from the moment you take them.
Sun Oct 18, 2015, 08:55 AM
Oct 2015

It's been a few decades since I took one, but I'm pretty sure that's the answer you'll get.

On edit: but it's far too early in the morning for me to reply, clearly.

It seems that your credit card thinks you still had a cash advance balance in September.

OrwellwasRight

(5,170 posts)
3. This is correct.
Sun Oct 18, 2015, 12:42 PM
Oct 2015

Purchases get a float till the end of the first billing cycle, so if you pay in full every month, you never pay finance charge. Cash advances accumulate interest from the second they are accessed. When you pay off your bill, you are only paying the amount accumulated from the day accessed to the day billed. Charges continue to accumulate after your bill is printed until you pay off the amount borrowed, which is why it takes two cycles to pay off all the interest.

At least, this is how I understand it.

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