Can a credit card company impose finance charge based on this situation?
I’m a lender with a credit card company who imposes finance charge based on your “average daily balance. ” Basically, if you have a balance on your account, they will impose a finance charge because you have a balance. I thought that finance charges are imposed if you made purchases or cash advances. I have never heard of a credit card company imposing such charge because you have a balance. I find this to be truly ridiculous. So basically, if you have a balance of $100 in your account, and you make your minimum payment (let’s say $20) for the month, and you still have a balance leftover, they will impose a finance charge based on the balance you have. So that means that the payment you’re making is not going towards your principal balance, instead it’s mostly going towards the finance charge, and your principal balance is still pretty much the same. Please advise, especially from those who are thoroughly familiar with consumer credit laws.
That is how EVERY credit card works. If your finance charges for the month are $20 and you just pay $20 then you aren’t reducing anything. Why do you suppose people get into trouble with credit card debit? The finance charge is always figured on the average daily balance on the account each month. If you PAY OFF your purchaces each month, you’ll minimize the FC to the amounts on the account daily.
Credit card companies are worse than the IRS.
They charge as they wish, most times even without informing you of change in policy!
YES THEY CAN AND YES THEY DO. GONE ARE THE DAYS WHERE THE CREDIT CARD COMPANIES GIVE YOU THE 30 DAY GRACE PERIOD
all card companys do that. they dont want you to pay more than the minimum either, so you will owe money for the rest of your life.
This is how all credit card companies work. Did you not read the terms and conditions before you signed up for the card?
That is how the credit card companies work. It is in the terms when you sign up for the card. Also, you are lucky to get one that just uses the “average daily balance” a lot are going to a 2-cycle “average daily balance” that is they take your average over two billing periods instead of just the one.
If you don’t like their terms then pay off the cards and don’t use them again.