What is two cycle billing when dealing with credit cards?
No it means that if you carry a balance then you will be paying higher interest rates. While most card issuers use the standard one-month method to calculate interest charges, some use a method that calculates interest on two previous months’ balances. Companies compute interest charges on your average daily balance by adding each day’s balance and then dividing that total by the number of days in the billing cycle. Some do it on a monthly basis, but others use the average daily balance over the last two billing periods. If you carry a balance, this usually means that you’ve lost any grace period on your new purchases. Unless you pay off your balance for two months in a row, the two-cycle method will include the prior cycle’s average balance in calculating your finance costs even though you paid off that cycle’s balance in full. You don’t face that expense with a single-cycle card.
