Previous Balance Method

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Dictionary Says

Definition of 'Previous Balance Method'

A credit card accounting method where interest charges are based on the amount owed at the end of the beginning of the billing cycle. The previous balance method charges interest based on the amount of debt the consumer carries over from the previous billing cycle to the new billing cycle. The cardholder's APR is divided by 12 to determine the monthly interest rate, and the previous balance is multiplied by the monthly interest rate to get the finance charge for the current billing cycle. This method can be more expensive for consumers who are in the process of paying down debt, because payments don't immediately reduce the amount of interest owed.
Investopedia Says

Investopedia explains 'Previous Balance Method'

The interest you owe when you carry a credit card balance can be calculated in different ways and can vary from card to card. The cardholder agreement will state the method your credit card company uses to calculate how much interest is owed. The most common methods are the previous balance method, the daily balance method, the average daily balance method, the adjusted balance method and the ending balance method. If you carry credit card debt, you should choose a card with both a low APR and a favorable method of calculating interest based on your pattern of making purchases and payments.
Search results for

'Previous Balance Method'

  • Credit And Debt Management: Credit Cards | Investopedia

    http://www.investopedia.com/university/credit-debt-management/management4.asp
    ... This method takes into account the average daily balance from both your previous
    statement and your current billing cycle, which may potentially lead to higher ...

  • Financial Forecasting: The Bayesian Method

    http://www.investopedia.com/articles/financial-theory/09/bayesian-methods-financial-modeling.asp
    Financial Forecasting: The Bayesian Method. ... theorem uniquely allows us to update
    our previous beliefs with ... given changes within their own balance sheets, bonds ...

  • Quiz: How Do You Pay? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1210/Quiz-How-Do-You-Pay.aspx
    ... even when the consumers are paying off their credit card balance in full each ... Individual
    decisions about the best method of payment depend on self-discipline. ...

  • How To Read Loan And Credit Card Agreements

    http://www.investopedia.com/articles/pf/08/agreements.asp
    ... Method of Computing Balance for Purchases Credit card companies use a ... their numbers
    on the average daily balance, others on the account's previous balance. ...

  • What's Your Employee Value? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1011/Whats-Your-Employee-Value.aspx
    ... Here's a method for calculating that value. ... So, in calculating an employee's value
    to an employer, these elements combine to create a balance sheet, the bottom ...

  • How Your Credit Card Is Changing - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0310/How-Your-Credit-Card-Is-Changing.aspx
    ... company can close your account and require you to pay your balance in five ... into effect
    in February 2010 will impact the allocation of payments method made by ...

  • 4 Ways To Deal With New Debit Card Fees - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1011/4-Ways-To-Deal-With-New-Debit-Card-Fees.aspx
    ... Have an average daily balance of at least $10,000 across your checking, savings ... Change
    Your Payment Method The simplest option is to keep your checking account ...

  • Top 3 Budgeting Tips For Lazy People - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1011/Top-3-Budgeting-Tips-For-Lazy-People.aspx
    ... The key is to find the method that is most effective for you that you will have
    no trouble ... The one thing you will need to oversee is your bank balance. ...

  • 7 More Things Your Banker Doesn't Want You To Know - Investopedia. ...

    http://financialedge.investopedia.com/financial-edge/1110/7-More-Things-Your-Banker-Doesnt-Want-You-To-Know.aspx
    ... old-fashioned method of putting pen-to-paper, to reconcile the bank's statements
    with their checkbook register. In some cases, your account balance will show ...

  • Top Mobile Banking Dangers And How To Avoid Them - Investopedia. ...

    http://financialedge.investopedia.com/financial-edge/0111/Top-Mobile-Banking-Dangers-And-How-To-Avoid-Them.aspx
    ... 1. Interceptions Text messages are not encrypted (a method of securing data in transit ...
    or "apps", are what allow you to check your account balance or move money ...

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