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Say I have a credit card, and I carry a balance of $200 from my statement at the end of the month of June. Are all transactions from the month of July immediately added to the revolving balance and included in the daily-balance (or average-daily-balance) interest calculations? Or do the balance of the July transactions also have to get carried into August and then they are added into the revolving-balance and included in APR calculations?

To state this question another way, do you start paying daily periodic rate on ALL future transactions immediately following a carried balance up until the point that you've completely paid down the revolving balance? Or do all future transactions also have to be carried past their billing cycle to be added to the revolving balance?

Once you've "fallen of the wagon," as said here: How to understand the calculation of interest for credit cards?

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  • Can you make that (much) more clear? As it is, just as 'ongoing credit card charges added to the revolving balance and interest calculations immediately following a carried balance' means little in simple English, it means just as little in simple Maths.
    – Robbie Goodwin
    Commented Apr 30, 2023 at 17:23

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Say I have a credit card, and I carry a balance of $200 from my statement at the end of the month of June. Are all transactions from the month of July immediately added to the revolving balance and included in the daily-balance (or average-daily-balance) interest calculations? Or do the balance of the July transactions also have to get carried into August and then they are added into the revolving-balance and included in APR calculations?

When you don't pay the statement balance of the credit card in full, then you lose the grace period. All new transactions are immediately added to the balance that is being charged interest.

If the billing period ends in late June, and the payment is due in July, but you don't pay it all off; then the payment due in mid August will include the balance left over from June, and all your charges in July, and the interest on both the remaining June amount and the July charges.

This loss of grace period is the reason why some sites suggest getting at least one credit card to zero quickly so that you can use a credit card in an emergency without making the interest charges worse.

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  • Perfect thank you. "This loss of grace period is the reason why some sites suggest getting at least one credit card to zero quickly so that you can use a credit card in an emergency without making the interest charges worse." This is exactly where my train of thought was headed. Additionally, if you were to have 2 cards and carry a balance on one, it would make sense to have all future transactions go to the seconds card until the revolving balance on the first was paid off?
    – Sanchewy
    Commented Dec 20, 2022 at 17:18
  • Yes that is correct. Put all new charges on the card you keep clean.
    – mhoran_psprep
    Commented Dec 20, 2022 at 17:43
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    Given the interest rate on credit cards, it never makes sense to carry a balance any longer than you absolutely must. Get out of that habit.
    – keshlam
    Commented Dec 20, 2022 at 18:00
  • Good point thanks. I personally use full statement balance auto pay on all my cards, I was just trying to understand how the grace period works if you were to fall behind.
    – Sanchewy
    Commented Dec 21, 2022 at 18:24

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