previous balance method

Definition

A technique for calculating finance charges on a credit card account that takes the outstanding balance at the end of the previous billing period and applies the interest rate to that total. Charges in the current billing period are not included. Interest charges are usually higher under this method than under other methods, such as adjusted balance, and average daily balance methods.

Use this term in a sentence

The previous balance method was a really good technique and we used it all the time and it worked great.

​ Was this Helpful? YES  NO 7 people found this helpful.

You may want to try and use the previous balance method to figure out far you have gone in the recent times.

​ Was this Helpful? YES  NO 2 people found this helpful.

Even though I paid off my credit card last month, I will still need to pay a finance charge this month because they adhere to the previous balance method.

​ Was this Helpful? YES  NO 4 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
billing cycle adjusted balance method