Double-Cycle Billing

AAA

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".

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Nonrevolver

    A credit card holder who pays his or her balance in full each ...
  2. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  3. Previous Balance Method

    A credit card accounting method where interest charges are based ...
  4. Credit Card

    A card issued by a financial company giving the holder an option ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), ...
  6. Average Daily Balance Method

    A credit card accounting method where interest charges are based ...
Related Articles
  1. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  2. Credit & Loans

    Take Control Of Your Credit Cards

    The plastic in your wallet doesn't have to hurt your finances. Learn how to manage it responsibly.
  3. Credit & Loans

    How Credit Cards Affect Your Credit Rating

    The average American household has four cards, but does that mean more is better?
  4. Credit & Loans

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  5. Retirement

    Understanding Credit Card Interest

    Paying these rates can impact your disposable income and your investment returns.
  6. Credit & Loans

    Digging Out Of Personal Debt

    Find out why good intentions can put consumers in an even bigger hole than before.
  7. Credit & Loans

    Best Credit Cards For 2015

    The best credit card for you depends on your financial goals. Our choices for the best cards in 4 different categories.
  8. Credit & Loans

    Credit Card Review: The Target REDCard

    Target's credit cards provide direct discounts, charge no fees, and give a surprising education bonus to local schools. But there's a high APR.
  9. Budgeting

    Are You Spending Too Much?

    Post-holiday credit card bills are just one signal that it's time to cut back on spending. Here are others.
  10. Personal Finance

    Understanding Credit

    Credit has three common meanings in the financial world.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center