What does 'two cycle billing' mean on my credit card account?

Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 3:55 pm
Post subject: Two cycle biling/ Balance Transfers

Cindy Taylor
Date: 5/3/2000 6:34 pm CDT

I am "pre-approved to apply" for a 2.9% Introductory Rate good until Oct
2000 with a Discover Platinum Card. The method for computing the balances
for purchases is "Two Cycle Daily Balance". What exactly does the mean in
terms of the actual interest rate? Thank you.

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 3:55 pm

Board Monitor
Date: 5/3/2000 6:57 pm CDT

Cindy,

Thanks for your post. Many cards have gone to two cycle billing. Generally speaking, the two cycle method results in higher finance charges, but not in every case. Cardholders that "pay off" their balance one month and then "carry a balance" the next month or vice versa are particlarly vulnerable using this method...read related article here...

bankrate.com/brm/news/cc/19980518.asp

There are cases, such as taking advantage of balance transfer offers, where this method can actually be beneficial...read related article here....

bankrate.com/brm/news/DrDon/Dr.Don_19990903.asp

So, in short, if you maintain a balance for the course of transfer (which most people do)...the two cycle method should not be viewed as a negative.

Hope this helps!

Regards,
Board Monitor
Jackie Hughes
CardRatings.org

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