Two-Cycle Billing on the Rise
I was away on vacation for a full week, so there was no posting. I also just got around to the great comments on my post about BofA's changes to my customer agreement.
One of the comments comes from old friend Joseph Onesta, the Wallet Wizard:
One of the things I've noticed with some of my financial coaching clients is the resurgence of the two-cycle calculation for interest. This seemed to almost disappear a few years ago with A and B paper lenders but now, even A paper lenders are touting teaser interest rates with the two-cycle billing that, for all practical purposes, doubles the amount of interest paid. They do this to their existing borrower base by offering a more prestigious card--more available credit, "lower APR" but no one is reading the fine print. And they don't realize that they are actually getting a different account which is being offered under different terms.
This is sad news. I looked at 2-cycle billing a few months ago to see if it could be morally defended, and concluded that it cannot.
If 2-cycle billing is making a comeback, this lends ammunition to the arguments for the "Stop Unfair Practices in Credit Cards Act."
Halo. Probaly it looks funny - but I still can't get the idea how does this 2-cycle method actually works. Can you open its secrests??? I also notices that this method may be the most frequent for credit line calculations. But..
So, what can you tell?
Posted by: Lenno | October 16, 2007 at 02:19 AM
This Bankrate article I link to in my other post gives a good overview of 2-cycle billing:
http://www.bankrate.com/brm/news/DrDon/20060901a1.asp
Posted by: Jeff Michael | October 16, 2007 at 10:08 AM
Well, thank you. In fact l have found it on my own.
One more question - is there any free soft, that can be used to protect ID during internet payments?
Posted by: Lenno | October 17, 2007 at 12:14 AM