Introduction
The previous balance method shows the method of credit card accounting in which the calculation of interest is on the basis of the debt owed at the end of the billing cycle.
What is the Previous Balance Method?
There are several methods to calculate the interest levied on the usage of credit cards. It varies across cards. The agreement signed at the time of receiving the credit card would have all the details pertaining to the method of interest calculation.
Highlights of the Previous Balance Method
The most popular methods of calculating the interest are ending balance method, adjusted balance method, and average daily balance method.
Individuals must choose that card which has the lowest APR.
Individuals must consider their spending patterns and decide to opt to avail that card which uses a favourable method of calculating interest.
