What a credit card interest charge means

Two kinds of interest

Look in the interest section of the statement, not only in the merchant list. A purchase interest line is tied to ordinary spending: groceries, bills, online orders. A cash advance interest line is tied to cash you took, a cash-like purchase, or a check the issuer sent you. The cash advance fee, if there is one, is a separate line from the interest. Fee amounts by card are on cash advance fees. A late fee is also separate. US late fee amounts that issuers print are on credit card late payment fees. Named Canadian card fees, which often raise the rate after missed payments instead of printing a late fee dollar, are on credit card fees by bank (Canada).

The statement prints the APR for each balance type. This guide does not copy an example APR, because an example is not your rate. Read the interest charge line next to the APR box on your own statement. If two interest amounts appear, add them yourself from the statement. Do not treat either one as a subscription. Find subscriptions from a statement is for repeating merchants. Interest is the issuer.

The US grace period

The CFPB says a grace period is the time between the end of a billing cycle and the date your payment is due. During that time you may not be charged interest if you pay your balance in full by the due date. Card companies are not required to give a grace period. Most cards do give one on purchases. If the card has a grace period and you are not already carrying a balance, you can avoid interest on new purchases by paying the balance in full by the due date. If you do not, you are charged interest on the unpaid part, and on new purchases from the date of each purchase.

Bills must be mailed or delivered at least 21 days before the payment is due. That is the mailing rule. It is not a promise that every grace period is 21 days long. Grace periods typically apply to purchases, not to cash advances or issuer checks. Those generally start interest on the transaction date. If you pay in full some months and not others, you may lose the grace period for the month you do not pay in full and for the following month. One month of leftover balance can create interest on the next month's new purchases even after you catch up. The CFPB tip is to pay the bill in full and on time each month.

The amount that satisfies that in full rule is the statement balance, not whatever the app shows today after new purchases. The difference, and why paying only the minimum can avoid a late fee and still leave interest, is on statement balance vs current balance. That page also quotes Chase and the CFPB on the same point. Use it before you pay the higher current balance and assume you had to.

Canada, and what this page does not restate

Canadian grace periods are in the card agreement and in the federal guidance already quoted on statement balance vs current balance. This page does not copy that guide's example dates or its example interest rates. The point for a first visit is the same shape: pay the amount the statement names, by the due date, if you want the interest-free period on purchases. Cash advances, cash-like transactions, and balance transfers are outside that purchase grace period on the FCAC explanation that guide cites. Your agreement is the tie breaker if the app label does not match the statement.

A US dollar Canadian card can show interest in USD. A Canadian dollar card shows it in C$. The currency on the interest line should match the card. A foreign purchase can also create a conversion fee that is not interest. That fee is on foreign transaction fees and, for a merchant that converted the currency at the terminal, on dynamic currency conversion.

Upload the statement on Expenvo. The PDF stays on your device. Expenvo lists bank fee lines it recognizes so you can see the date, the name, and the amount before you call. It does not call the bank, and it does not promise a refund. How to ask is on how to ask your bank to refund a fee.

Questions

Does paying the statement balance stop purchase interest?

The CFPB says you may not be charged interest if you pay the balance in full by the due date, on a card that gives a grace period, when you are not already carrying a balance. The statement balance is the closed bill. Cash advances are usually outside that grace period.

Why did interest appear on new purchases after I paid most of the bill?

If you do not pay in full, the CFPB says interest applies to the unpaid part and to new purchases from the date of each purchase. Paying in full only some months can also cost the grace period for the next month.

Is a cash advance fee the same as cash advance interest?

No. The fee is a separate charge for taking the advance. Interest on that balance generally starts on the transaction date. Both can show on one statement.

Sources

• CFPB: what is a grace period for a credit card

Related guides

• Statement balance vs current balance
• Cash advance fees and interest
• US credit card late fees