Disney Visa interest calculation (please help)

[DizWacko]

OK here is the deal. My wife had a balance on her August statement of roughly $1400. These were all new charges for the month (the previous months balance was paid in full. I paid $1200 of it the week that this statement came out. This would leave a balance for August for $200. <so far so good>

We we just got our Sept statement, and there is a finance charge of almost $30 on there !!!!

How can there be a $30 finance charge on a $200 balance?

Chase bank stated that they calculate this using "average daily balance", then multiply that times the interest rate (which is around APR 20%, a whole other story not the subject at hand).

Does this math add up to you? Disney has made errors on finance charges before and corrected those errors, I now have to watch them VERY carefully every single month to prevent from getting ripped off.

So does the $30 finance charge make sense???

 

[my3kids]

I Disney Visa World, yes. If it isn't paid in full they charge interest on a large amount. And, this will continue over a couple of months because of the way they calculate on a 2 month cycle. If you pay that $200 this month, next month you'll still get a bill for the interest because of the 2 month method. After you've paid in full for 2 months then it should stop accruing hidden interest, although I wouldn't use the card until you finish up the 2 months because that will add to the interest calculation, I think.

 

[Toby'sFriend]

very easily. It is impossible to check the math without knowing the balance on the account every day of the month - so you'd have to know when the charges were made.

To check
look at the balance (not just new charges - the balance) every day of the month and add all those together

for instance Day 1, $10
Day 2, $25 (25 + 10 = 35)
Day 3, $170 (35 + 170 = $205)
and on and on through day 30 (or however many days in the billing cycle)

Then divide that number by 30(or days in the billing cycle), that is your average daily balance

Your daily interest rate at 20% yearly is .000548

Take (.000548 x Average Daily Balance) and that is your interest charge for the month.

Depending on when your wife made the charges during the month, the interest can very easily be $30. BTW, if you didn't pay the charges until after the bill was generated, your payment doesn't count into that month's interest calculation)

 

[DizWacko]

WOW ... thanks so much for your help. I now understand the math, but it blows my mind of how much of a ripoff it is...