Two-Cycle Billing

Discussion in 'Credit Talk' started by matty61184, Nov 10, 2001.

  1. matty61184

    matty61184 Well-Known Member

    I've noticed with some credit card companies like Discover and First Usa, they use two-cycle billing. What is it? Does it cost you more in interest charges or less?
  2. skittens

    skittens Active Member

    I believe Discover Card invented it. Yes, it does cost you more. Basically if you buy something today, and don't pay it completely off when you get your bill at the end of the month, interest charges would then be applied going back to today (i.e. no grace period). With one-cycle billing, you would still get the grace period, because interest charges would start later.
  3. PsychDoc

    PsychDoc Well-Known Member

  4. rubyjean

    rubyjean Well-Known Member

    Two Cycle Billing is when the average Daily balance is calculated from Two Cycles instead of one. Finance Charges are typically higher than a single cycle. Using a two cycle , wipes out your Grace period for people who carry a balance . If the bill is not paid at the first billing interest becomes retroactive to the first purchase date.. Most Companies use Single Cycle billing
  5. lbrown59

    lbrown59 Well-Known Member

    It's giving you the shaft twice a month instead of once a month!
  6. cjd

    cjd Active Member

    No, it's giving you twice the shaft once a month. Basically, when they calculate how much you owe them they look back at the average balance in the last TWO months instead of one month.

    If you are paying down your balance, this shafts you because you still pay on balances a month after you paid it. This is really noticable when you completely pay off the balance because you will get interest charges the next month.

    However, if you are increasing your balance every month it works out to your advantage. So credit card companies like it because it rewards you for charging more on their card, but penalizes you for paying it off. Also, it makes it much harder to get a grace period once you start carrying a balance.

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