Tuesday, June 08, 2010

Banks charge interest on all your purchases if you withhold anything during a vendor dispute

Here’s a little knickknack that I’ve noticed on credit cards, at least with the Bank of America. I usually pay the “balance at last statement” every month, but if part of the bill is in dispute with a particular vendor, I subtract that amount (assuming I don’t go below the minimum, which never has happened).

The bank has never charged interest when the “amount due at statement” was paid, but if any portion is not (even one penny), it seems to charge interest all the time on all your purchases, even that not billed yet. That is sneaky! Therefore, if you would want to avoid any interest, you would have to pay disputed charges and wait for a vendor to refund.

I often have one dispute or another from time to time; usually I have $25-$100 in dispute among my cards much of the time.

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