Past due balance method

Past due balance method

A method for calculating financial charges that charges no interest on a balance as long as that balance is paid off within a pre-determined time period; the balance remaining after the interest-free period is over is then considered "past due," and is penalized by the application of an interest rate. The past due balance method is applied to both credit card and charge accounts.

Past Due Balance Method

A method for determining charges for a loan or credit sale payment that has not been received by its due date. Generally, the method is charging a certain percentage of interest on the outstanding payment. For example, if one has a $100 balance on his/her credit card and does not pay it off by the due date, interest begins to accrue on the $100 and the card holder owes for that as well.
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