Thursday, December 13, 2012

No Grace Period

I received my credit card bill, yesterday, and was surprised to learn that I'm still paying for the Greece trip, which occurred in October.  Specifically, I'm still being charged interest and fees for the emergency cash advance made on my card when we were in Lindos and Jenese's own card stopped working (which I previously blogged about here).  This is not discernible from my statement -- it simply shows:


In case that isn't clear, there's another box at the bottom of the page that shows:

Interest charge calculation

Balance type          APR            Balanced Subject to Interest Rate             Interest charge
Standard Purch         14.18%                     $796.84                                              $9.91

There can't be any questions about that, right?

Well, I had some questions, so I called customer service.  The robot seemed completely baffled by my questions, so it went to look for a sentient flesh sack, also known as a customer service representative.  "DANGER, WILL ROBINSON!  DANGER!"

The CSR began his explanation by telling me that I should ignore the $798.84 figure, since it would just confuse me.  I was indeed confused, since that "balance" does not appear anywhere else on my statement, or any prior statement, and no amount of mathematical jiu jitsu on my part could produce that figure.  He said it was a running average balance amount that they are required by law to disclose.  I really appreciate consumer protection laws that require disclosure of numbers that I must completely ignore, lest I be confused.  Don't you?  Maybe it would help if that same law also required that "<---- ignore this" be printed next to the "running average balance."

As for the "INTEREST CHARGED TO STANDARD PURCH" on 12/04, I was tempted to allow confusion to set in, but the CSR helped me to understand that the interest had nothing to do with a purchase, nor did anything actually occur on 12/04.

After the CSR gave me the same explanation multiple times, it began to sink in that the crux of the matter was that by taking a cash advance in the first part of October, I had entered the dark forest of No Grace Period.  My own explanation of the explanation is probably wrong, but this is how I understand it.  Normally, no interest accrues on your balance between the time you make a purchase with the card and the payment due date.  That is the "grace period."  But if you get a cash advance on your card, the grace period is suspended until the loan amount and all interest is paid off.  Consequently, when you receive your next statement, it will show the amount "currently due" and the "due date," but interest will be accruing until paid, even if paid by the due date.

Do not enter the No Grace Period
So my October bill included outrageous interest charges and cash advance fees, which I expected and was prepared to swallow.  I paid the full amount prior to the stated due date.  What I did not know, however, was that I need to tack on an extra amount to cover the interest that would accrue on the balance, as well as on subsequent purchases, between the time the statement was printed and when my check would be received.  That additional accrued interest amounted to $9.91.

I asked the CSR if the same thing was going to happen this month, meaning that interest was accruing as we spoke, and he said no.  But I don't see why it wouldn't, since I remain stuck in "No Grace Period" until all interest charges are paid off.  So to be safe, I'm mailing in an extra $50, this month.  I hope there is not an over-payment fee tacked onto next month's bill.

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