DEFINITION of 'Double-Cycle Billing'

A method used by creditors, usually credit card companies, to calculate the amount of interest charged for a given billing period. Double-cycle billing takes into account not only the average daily balance of the current billing cycle, but also the average daily balance of the previous period. Double-cycle billing can add a significant amount of interest charges to customers whose average balance varies greatly from month to month.

Also referred to as "two-cycle average daily balance".

BREAKING DOWN 'Double-Cycle Billing'

Double-cycle billing has long been used by credit card companies to increase the amount of interest charged to customers. For the most part, many credit card customers are unaware of how this billing method affects their interest charges. The practice came to the general public's attention in 2006 during a United States Senate report on credit card practices.

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