Trailing interest (also known as residual or two-cycle interest) refers to the interest that accrues on a credit card balance after the statement is issued, but before the balance is repaid.
The monthly statement shows how much interest is owing at the time it is produced. The balance then continues to accrue interest until it is repaid. This additional interest is typically added to the following month's statement.
It has been criticised as an unfair practice, as it allow companies to collect
interest
In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...
on balances that the customer believes they have already paid off.
References
External links
Consumerist -- Be Billed For Paying Off Your Bills With BoA's Magic Trailing InterestAbout Trailing Interest
Interest
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