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Average daily balance |
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Average daily balance A method for calculating interest in which the balance owed each day by a customer is divided by the number of days. See also: Adjusted balance method and previous balance method. Average daily balance. The average daily balance method is one of the ways that the finance charge on your credit card may be calculated. The credit card company issuer divides the balance you owe each day by the number of days in your billing cycle and multiplies the result by the interest rate to find the finance charge for each day in the period. If this is the method your creditor uses, the larger the payment you make and the earlier in the cycle you make it, the smaller your finance charge will be. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Another provision requires banks to pay interest on an account's average daily balance, rather than its lowest daily balance, Mulford added. Using an average daily balance method of calculating finance charges instead of the two-cycle method. 75 for opening and funding a checking account with a minimum deposit of $50 and maintaining an average daily balance of $500 for at least one month |
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