Credit Repair Blog

Say Goodbye to Two Cycle Credit Card Billing

Two cycle billing, also known as double cycle billing, has become a major problem within the credit card industry. This negatively effects consumers but does a lot of financial good for the credit card companies. Fortunately, this is something that is on its way out the door. Thanks to the new Credit Card Reform Act two cycle billing will no longer be a “trick” that credit card companies can take advantage of. From a consumer point of view this is something to get excited about.

The new rule makes it illegal for credit card companies to go back to past billing cycles when calculating interest to be charged for the current billing cycle. Consumers who pay off their bill in one cycle, but maybe not the next, have been hurt time after time by this practice. In the future, credit card companies will no longer be able to take advantage of two cycle billing which will financially benefit the consumer.

Does your credit card company currently use a two cycle billing method? Chances are that you don’t know the answer to this question. At this time it is legal for companies to use two cycle billing, although many have never done so. Some companies rely on single cycle billing, and those that do will not have any problems making a change in July 2010 when the new Act goes into effect.

Two cycle billing allows a credit card company to use two months to calculate the average daily balance. In the short term two cycle billing may appear to be beneficial, but over the long haul the credit card companies are the ones that come out on top.

Once the Credit Card Reform Act becomes effects in July 2010 credit card companies will no longer be able to use the two cycle billing method.