Two Cycle Daily Balance Credit Card Interest Method
Author: Guest
Posted: Wed Sep 24, 2003 6:55 pm
Post subject: Two Cycle Daily Balance Credit Card Interest Method
I noticed Bank One's terms and conditions. Unlike other credit cards, Bank One and Discover use two cycle daily balance method which add up more interest than Average Daily Balance method.
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Author: Verne
Posted: Wed Sep 24, 2003 7:42 pm
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Big,
You're right. There's something about a 2-cycle billing which I didn't have with Wachovia.
I've never been sure about the impact of this. Math really isn't my strong suit. Obviously, credit cards isn't my strong suit either or I wouldn't be in this fix.
This latest closing will lower my available credit by 25% and make my debt ratio over 90%. I'm now down to 3 cards with only one I can trust to never reprice or change terms.
What's incredible is that Bank One sent me a 5.9% balance transfer a week before the change of terms came in a separate envelope. 5.9% for the "life of the loan". Yeah sure.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Wed Sep 24, 2003 10:10 pm
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Verne, have you called and asked about the 5.9% for the life of the loan offer? What did they say? If the answer is what you want to hear that they truly will not raise the finance charges during the life of the loan and you are paying on time, write a balance transfer check to yourself, deposit it in your checking account, and turn right around and pay off your own balance with their money.
Oh wait....they would probably apply the payment to the lower balance transfer debt before they credited anything against the purchase balance and it would be a wash. Oh well, not all ideas are winnere.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Peachkiwi
Posted: Thu Sep 25, 2003 9:02 am
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Quote:
It finally happened. My old Wachovia account, that Bank One bought, has just been repriced. I sent in my rejection of the new terms and closed the account.
I feel your pain! I also have an old Wachovia account at 6.15%! I haven't received the repricing as yet though. Ever since Bank One bought the account, I figured it was just a matter of time before they increase their interest rates because the lowest they were offering was in the ball park of 9%--at least according to their web site.
Author: Eugene
Posted: Fri Sep 26, 2003 10:05 am
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Verne, a couple of points come to mind.
1. Consider getting a new card, or at least more credit on the existing accounts, soon (before Bank One reports the account closed) to improve the balances to limits ratio. 90%+ is bad enough that a new account might actually improve things (a new account might hurt you less than the high ratio does).
2. Two-cycle daily balance method is not as bad as you might think. With it you underpay interest the first month you carry a balance and overpay it the first month you stop carrying balance. The bottom line is comparable (although my understanding is it's not the same, especially if there are transactions during the cycle). Two-cycle method does not affect you if you do not carry a balance; affects you very little if you carry it for a while, then stop forever; and affects you somewhat more (including a significant confusion factor) if you carry the balance in some months and pay it off in others.
3. How can you trust even one card to "never reprice or change terms"?
4. Irony apart, why didn't you take the "5.9% for the life of the loan" offer? To avoid having two balances with different APRs on the same card? If that's the case, you could have first moved ALL balances away from the card temporarily, then transfered whatever you need back at 5.9%.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Wed Sep 24, 2003 6:55 pm
Post subject: Two Cycle Daily Balance Credit Card Interest Method
I noticed Bank One's terms and conditions. Unlike other credit cards, Bank One and Discover use two cycle daily balance method which add up more interest than Average Daily Balance method.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Verne
Posted: Wed Sep 24, 2003 7:42 pm
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Big,
You're right. There's something about a 2-cycle billing which I didn't have with Wachovia.
I've never been sure about the impact of this. Math really isn't my strong suit. Obviously, credit cards isn't my strong suit either or I wouldn't be in this fix.
This latest closing will lower my available credit by 25% and make my debt ratio over 90%. I'm now down to 3 cards with only one I can trust to never reprice or change terms.
What's incredible is that Bank One sent me a 5.9% balance transfer a week before the change of terms came in a separate envelope. 5.9% for the "life of the loan". Yeah sure.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Wed Sep 24, 2003 10:10 pm
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Verne, have you called and asked about the 5.9% for the life of the loan offer? What did they say? If the answer is what you want to hear that they truly will not raise the finance charges during the life of the loan and you are paying on time, write a balance transfer check to yourself, deposit it in your checking account, and turn right around and pay off your own balance with their money.
Oh wait....they would probably apply the payment to the lower balance transfer debt before they credited anything against the purchase balance and it would be a wash. Oh well, not all ideas are winnere.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Peachkiwi
Posted: Thu Sep 25, 2003 9:02 am
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Quote:
It finally happened. My old Wachovia account, that Bank One bought, has just been repriced. I sent in my rejection of the new terms and closed the account.
I feel your pain! I also have an old Wachovia account at 6.15%! I haven't received the repricing as yet though. Ever since Bank One bought the account, I figured it was just a matter of time before they increase their interest rates because the lowest they were offering was in the ball park of 9%--at least according to their web site.
Author: Eugene
Posted: Fri Sep 26, 2003 10:05 am
Post subject: Two Cycle Daily Balance Credit Card Interest Method
Verne, a couple of points come to mind.
1. Consider getting a new card, or at least more credit on the existing accounts, soon (before Bank One reports the account closed) to improve the balances to limits ratio. 90%+ is bad enough that a new account might actually improve things (a new account might hurt you less than the high ratio does).
2. Two-cycle daily balance method is not as bad as you might think. With it you underpay interest the first month you carry a balance and overpay it the first month you stop carrying balance. The bottom line is comparable (although my understanding is it's not the same, especially if there are transactions during the cycle). Two-cycle method does not affect you if you do not carry a balance; affects you very little if you carry it for a while, then stop forever; and affects you somewhat more (including a significant confusion factor) if you carry the balance in some months and pay it off in others.
3. How can you trust even one card to "never reprice or change terms"?
4. Irony apart, why didn't you take the "5.9% for the life of the loan" offer? To avoid having two balances with different APRs on the same card? If that's the case, you could have first moved ALL balances away from the card temporarily, then transfered whatever you need back at 5.9%.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
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