General Question

casheroo's avatar

Will I continually get a periodic rate finance charge?

Asked by casheroo (18091points) March 20th, 2009

I have a Bank of America credit card. We just paid it off completely, last month.woohoo!
I got a statement this month, and I owe them money for a “periodic rate finance charge”.
I looked it up and their site says this
What is a periodic rate?
The periodic rate is a rate of finance charge that may be imposed by a creditor on a balance for a day, week, month, or any subdivision of a year.

I’m confused. I paid it off, what are they charging me for? And will I keep getting it each month, to continue to have a credit card with them?
I’d rather not get rid of the card, because it’s our “oh shit, emergency!” card, plus, getting a credit card at the rate I had will be impossible now.
Anyone able to explain it to me in a way I might understand?

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7 Answers

SeventhSense's avatar

It’s like a yearly fee maybe? If so you can threaten to close the card unless they release you from that obligation.

Darwin's avatar

Sounds like you paid it off a couple of days too late to completely avoid a charge of some sort. However, possibly someone who knows these things will come explain, as I don’t really know either.

http://answers.yahoo.com/question/index?qid=20080821192843AA9tMyh seems to agree with that idea – it says that it is the finance charge for the period between the finance charge on the bill you paid in full and the day they got your check.

casheroo's avatar

Ohh, so it’s just for what I owed. So, that should be the last one, since I don’t owe anything else?
Well, it’s only for 3.95, so that’s not bad at all.

EmpressPixie's avatar

Yes—you pay interest on your balance one month after the entire thing is paid off if you carried the balance the month before.

So in June I charge $400 and only pay off $200.
In July I pay off the rest of the card.
In August I have one last finance charge to pay.

It’s annoying and a pain in the butt, but congratulations for paying off your card!

miasmom's avatar

Yup, if you pay your bill in full this month you won’t get a charge anymore. It is really frustrating to me, I remember the first time it happened I thought, hey I paid it in full, what’s up with this…now I just always pay my card off and don’t have to worry about the charges.

shirleylopez's avatar

That is true, to avoid finance charges, it is better to pay the total amount every month and to always pay on time. A delay in payment will have additional charges.

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