cash advances

Discussion in 'Credit Talk' started by Mike, Apr 25, 2001.

  1. Mike

    Mike Well-Known Member

    Hi all, since these don't come with grace periods, how is the interest calculated on them? Say if I use my card to withdraw $20 at a bank today (25th) and my statement closing date is the 11th of every month, how do the banks calculate the interest?

    How is the interest calculated on regular purchases?

  2. RichGuy

    RichGuy Guest

    Without a grace period, they just compute the average daily balance for cash advances, using the day the ATM withdrawal cleared. For 16 days out of 30, they would simply multiply x dollars times 16 days, and divide by 30 days. Average daily balance would be less than x, but interest would be applied for the whole 30 days.

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