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Comment by samsonradu | Hacker News Reader

But when exactly do these get applied? If you can’t settle at the end of a month you go into the next one with 115% of the debt?

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No the double digit percentages are annualized interest rates, not monthly.

For mine, interest starts accruing from the date of purchase for each purchase, except if you pay your new balance in full in the first statement. Generally the bank calculates it on a daily basis.

You should read your account agreement to figure out how your bank calculates this. Mine is here on page 11: https://www.chase.com/content/feed/public/creditcards/cma/Ch...

Thank you for the link. We mostly have debit cards in this part of the world. It’s hard for me to understand laying any interest for consumption goods purchases.

It is still not fully clear when does the settlement happen? At the end of each month, with a ~1.5% interest applied on the negative balance?

That depends. For some like the Apple credit card they have a simple due date that's the end of every month. For others they often allow you to choose a day of the month as a due date (perhaps aligning with your paycheck date) and is shown on your statement, which gets produced about a month before the due date. And if by the due date you didn't pay off the entire new balance, the interest charges will then appear on the next statement.

Now you can see that for reasonably well off people credits cards offer a nice interest-free float. For example you make a large purchase of $1000 on January 15, but your statement gets produced on February 10 with a due date of March 4. Et voilà you can pay for that $1000 on March 4 with zero interest.

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