Previous balance method

Previous balance method

Method of calculating finance charges based on the account balance at the end of the previous month.

Previous Balance Method

An accounting method in which interest owed on a good or service is calculated based on what is owed at the end of the month. Most credit cards calculate cost and interest on top of the balance at the end of the previous month. Payments on instruments that use the previous balance method are due at the beginning of the month.
References in periodicals archive ?
One of the least advantageous is the previous balance method.