I have a Home Depot credit card that is supported by TidewaterFinance. I was charged interest on my purchase even though I had zero balance 2 cycles ago and never received a bill last month because I had zero balance. When I called they said credit agreement says interest will begin 25 days post-purchase. Is that legal?

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    Does your agreement not say that? – quid Jun 14 '18 at 0:00
  • Yes but normally there’s a grace period to pay upon receipt of stmt. Purchase date was 5/8. Stmt opening 5/2 stmt closing 6/1. Days in billing cycle 31. So I’m supposed to pay charges immediately after purchase date and not wait for the stmt? I’ve never heard of this – Linda Piccinich Jun 14 '18 at 2:03
  • Whether or not you got a bill dated 5/1 (the day your previous statement closed) and whether or not the bill showed a balance due of $0, your credit card company generated a _statement_ dated 5/1 showing what you owed them. If the statement balance was $0$, the company might not have sent you a bill. But please do distinguish between the statement balance and the minimum amount due; these are two different numbers. – Dilip Sarwate Jun 14 '18 at 3:28
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    @DilipSarwate: If the purchase was 5/8, then it would not appear on the 5/1 statement. – Ben Voigt Jun 14 '18 at 3:57
  • @LindaPiccinich: Were the (admittedly unusual for bank cards, but store cards are known to be predatory) grace period rules stated in the Truth-in-Lending matrix, or deep in the fine print of the cardholder agreement? If the former, you're stuck. If the latter, you might be able to challenge it. – Ben Voigt Jun 14 '18 at 3:59

It all depends on what your credit card agreement says. Most credits cards in the US have a "grace period" of at least 21 days, with 25 days being the most common. You mentioned 25 days, but you didn't specify if your card has a "25 day grace period". If it does, then generally this means your June 1 statement would not accrue any interest until the due date on June 25 if you had paid your previous 2 statements in full by their due dates.

I have found that the Home Depot credit card with Citibank has a 25 day grace period, but I cannot find any info about the card with Tidewater Finance. If you can find your agreement I would search for the words 25 day "grace period" vs 25 days "after/post purchase". If the latter then sadly their math is probably correct. Whether it's legal or not is a question for another forum, though I'd be surprised if Home Depot would be affiliated with a company that is breaking the law.

As a side note, if there is a specified "grace period", this would be a pretty strange mistake for an automated system to make, so the most likely scenario is that you carried a small balance and didn't realize it, and doing this negates the grace period. If it turns out that this is what happened, and if the amount carried over is less than the interest charged, you could ask for a one-time waiver on the interest and maybe they'll be nice and grant it.

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  • I am only down voting this one because what you stated is not always true. It is true for most (all that I know of) banking hosted cards. But some store CCs do have special rules in the fine print where the interest will start charging even if you have yet to get a statement for the transaction, and even if you've paid the balance in full with each statement. These cards are, in my opinion, not worth using or keeping except to pad your credit score metrics, once you've utilized their opening offer – Shorlan Jun 14 '18 at 21:57
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    @Shorlan - What you are describing is a card without a grace period. I looked up the Home Depot card and it states it has a 25 day grace period (and no fine print can rewrite the definition of what a grace period means). – TTT Jun 14 '18 at 21:58
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    OP says they have the Tidewater credit line, not the Citibank credit card. The Citibank one definitely has a grace period of 25 days starting with the statement date. The OP's Tidewater account, more difficulty finding the T&C. – Ben Voigt Jun 14 '18 at 22:37
  • @BenVoigt - you're right. I can't find it either. I updated the answer to cover both scenarios. – TTT Jun 14 '18 at 22:55

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