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Topic Two-cycle average daily balance?
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By lasarch
On 05/30/02
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I want to switch my $4700 credit card balance to a new lower rate card (currently paying 12.9%). How can I compare if I am better off with a 7.9% fixed rate card with "two-cycle average daily balance" method of computing interest or an 8.9% fixed rate card with the "average daily balance" method? I usually carry a balance on my cards, but pay 2-3X minimum payments.
Thanks for the help.
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By CreditQueen
On 05/31/02
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You NEVER EVER EVER EVER want a card that has a two-cycle average daily balance. It's that plain and simple. I know this because I work for a major credit card corporation and I'm a credit card account manager. Believe me, I work with this stuff day in and day out. Here's a perspective that may help you out: Would you rather pay interest at 7.9% for two months worth of balances at one time or 8.9% for one month at one time?? The answer is simple: The 8.9% is the best. If you think about it that "7.9%" really isn't 7.9% you are basically paying double. And as for transfering balances around, I don't recommend it! I recommend calling your current credit card companies and seeing if they can give you a promotional rate. The company that I work for offers about 3-4 promotional rates for our cardholders per year. See what your bank can do for you!
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By colin
On 05/31/02
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Two cycle billing only affects the amount of interest you pay when you go from having a $0 balance to carrying a balance. With a $4700 balance you should simply select the lowest interest rate.
Good Luck,
Colin
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your questions are answered by the gromco team and card users like you
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