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.

Related Terms

billing cycle -

adjusted balance method -  More

past-due balance method -  More

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