Couple of days ago I experienced something I could not understand and never expected. Doesn't it always seem that the interest charge on credit cards debts is too much relative to the amount of debt and the interest rate? It turned out that you do not get charged interest on the amount of debt you have but instead on something called "Balance Subject to Interest Rate" and it is, according to the internet search I did: “the average daily balance” of the account, including current transactions". In my case for example the debt I left was about $550 but the amount on which I was charged interest was over $1000. Who would have thought of something like this? You may think about the interest rate and the effect of compound interest, but charging based on amount higher than the debt you incur, how is that possible? Anyway, I intend to scrutinize this more when I have the time for it, but for now I keep scratching my head puzzled by such a totally unforeseen inexplainable thing.
