Although consumers find it confusing it is a fair interest charge. Here's why: Everyday you carry a balance a finance charge for that day is assessed. Example. Your bill prints on October 1 $100 with a due date Oct 31.
Bank receives your payment for $100 on Oct 15.
You carried a balance for 15 days x your daily effective rate.
Bill the interest for 15 days on the Nov 1 statement.

I've said it before and I'll continue saying it until you all learn:
"CREDIT UNION!"

Hmmm... last post didn't post in 20 minutes.... I'll try this again.

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I've said it before and I'll say it again
"CREDIT UNION!"

I found out about this practice the hard way. A year or so ago, I paid off a card only to see interest show up the next month. In fact, I almost overlooked the bill entirely, assuming that the card no longer carried a balance (I can't imagine getting a late fee for something like this).

I called to inquire about the additional charges. As the fees were explained, I planned on threatening to close out the account unless they were dropped...I never got the chance.

In the same breath that the CSR finished her spiel, she assured me that an equal credit would be applied to the next month in order to cancel it out.

Perhaps I got lucky and was sent to a sympathetic rep (more likely, the fee wasn't ample enough to be worth their time). It's well worth a phone call to find out.

homerjay: Amen. Switched to one three years ago, and NEVER looking back.

Kutabare, this same thing just happened to me. I paid off the balance, and noted I still had $2.64 in interest charges. Nothing that's going to break the bank, but still an issue in my book. The CSR backed off the charges.

She then explained to me how interest works. I'm a Senior Financial Analyst and a former Big Five (Four now) public accountant, I interrupted her and explained that I knew how interest works. (I desperately wanted to say something demaining like "Yeah, one of us learned that in an Economics class in college," but I refrained.

My experience was with MBNA, however it says Bank of America on their website now, so I'm assuming they are working with them somehow (partners, subsidiaries, etc.... I'm not sure, haven't paid much attention to them lately).

I want to cancel the account, however I've had this credit card the longest (nearly 10 years), and have a huge available credit on it that I would like to hold on to... just in case of emergencies. I've got two other major credit cards (no balances) that I only use, with combined available credit close to the MBNA one. Should I close MBNA?

You know, if you read the agreements that companies send you it's all written in there in black and white. If you don't understand it then you should ask questions before signing the agreement.

It's not uncommong for credit offers to have no grace period anymore which means that you are accruing interest from the moment you swipe the card in the machine. If you read the agreement you shouldn't be surprised by what happens. If you disagree, don't get the card.

I would have expected a Senior Financial Analyst to note a $35 billion buyout in the financial industry. :)

I didn't say I was a good one! :) Plus, if it doesn't affect my industry (even if it does), it has no impact on the work I do. I use to pay attention to that in public accounting, but now I just work and play video games.

I'm just stating the fact that none of my other credit cards have these "trailing interest" mechanisms. I doubt many (read ANYBODY) reads the "Changes to Your Policy" booklets sent (it seems monthly) to me. It highlights that the credit card companies are trying to squeeze just a little more out of each of their customers... Shouldn't surprise to anyone at this point (particularly the readers here).

Steve: "Should I close MBNA?"

MBNA's put through a bunch of changes in their credit cards lately -- you probably got the recent "change of terms" mailing, in which they claimed they were making all these changes to better serve customers and comply with updated laws. Most of the changes customers would care about were pretty buried -- I only read the whole thing because I was sick as a dog and bored.

I called and told them I wanted my old terms back or I'd go elsewhere. (I really didn't want to -- I have a kick-ass rewards program on that card.) And presto-chango, everything was back to the way I like it AND I got a longer float.

So I think what they really mean is "to better screw customers too lazy to call and bitch and pretend there's some fake legal reason for it."

The instant I get charged interest on a balance between when the bill was cut and when I make the on-time payment is the instant my business goes elsewhere, though.

Steve, my experience was also with a long held MBNA / BoA relationship.

According to myFICO, you should not close unused credit cards as a strategy for raising your score. Canceling the card might even have a negative impact.

While I never canceled my card, I have refrained from using it. Do you plan on applying for additional credit in the near future? Are you paying annual fees on the card in question?

I don't know if my credit card company is evil or just incompetent. Whichever it is, they're madly dancing along the line between the two.

Two months ago, I paid off all my credit cards from an inheritance. One of my cards had around $700 on it, so I did what I thought would be the smart thing. I called a rep, got the balance, and paid it in full.

The following month, I got a bill for $5.24. I figured it was just the interest, so I called the bank (it was either Citi or ANB) and spoke with another rep. The representative I spoke with just took care of it, and I was on my way.

Earlier this month, I got yet another bill from them.

This one was for $0.02. Fortunately, a third rep took care of that, too.

I'm looking forward to my bill for $0.01 next month...

I am an American living oversees and used my MBNA card recently on a side trip. When I got the statement it had a bunch of foreign currency transaction fees on it. There is no obvious way to ask questions about these fees on the website and telephone coverage here is pretty spotty. Luckily I have other cards that don't actually charge me for using them. (other than their profit from exchange rate calculations)

I do believe that MBNA was merged with Bank of America and as such all their cards now carry the Bank of America logo. I've had roommates and other peers in the past that have had atrocious incidents with Bank of America. Nobody I've talked to exactly sings praises about their service. I had a MBNA card as well as a BOA credit card with them and a payment could take up to three weeks to process at one point. MBNA card was a little better than that, but now that it sports the super duper Bank of America logo on the front I'm thinking of taking my business elsewhere. I certainly will if I post a payment three weeks early only to incur an interest fee.