- Some credit card companies use the "adjusted balance" method for applying finance charges. This means the credit card company will subtract all of the payments made during the month and then add the finance charges to the remaining balance.
calculated, differential, left over
Related Terms and Acronyms
- Balance (bal.) — Abbreviation,
- The amount of money in your account.
- Credit Card (CC) — Acronym, Very Important,
➥ A payment card that gives customers access to a revolving line of credit.
- A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit, with a credit limit and interest rate determined by the borrower's income and credit report.
- Grace Period — Definition,
- If the credit card user does not carry a balance, the grace period is the interest-free time a lender allows between the transaction date and the billing date. The standard grace period is usually between 20 and 30 days. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card. People who carry a balance on their credit cards have no grace period.
- A window of time where a policyholder still has time to pay insurance premiums.
- Minimum Payment — Definition,
- The minimum amount a cardholder must pay to keep the account from defaulting. Some card issuers set high minimums if they are uncertain of the cardholder's ability to pay. Most card issuers require a minimum payment of three to five percent of the outstanding balance.
- Previous Balance — Definition,
- Some credit card issuers base finance charges on the amount owed by the account holder at the end of the previous billing cycle.
- Revolving Credit — Definition,
- A line of credit that does not have a specified repayment schedule but may require a minimum payment to cover interest and contribute to paying off principal. Typical of credit card loans, chequing account cash reserve or overdraft accounts that have pre-approved lines of credit.
- Zero Balance — Definition,
- What shows on a credit card customer's bill when the outstanding balance has been paid and no new charges have been incurred during the billing cycle.