I got my credit card statement back. My billing cycle usually is from the 7th of each month and the due date is the 8th of the next. Anyhow spend $1428 last month and paid off $1253 in a series of payment before the due date. Unfortunately was $175.78 short.
Now i got charged $25 in interest. :O
I know i'm a huge idiot for not knowing exactly how this works already. I was under the false impression all this time that they charge interest only for the amount that your short but clearly i was wrong and after talking to the bank rep was told that if i'm short (at all) they charge interest on the charges on a daily basis until the payment is made and unless you pay in full you'll get dinged for the whole thing..... that's what i understood.
Anyhow that interest means i didnt pay $1500 of balance (19.99%).... 25*12/0.2=$1500 which is "more" than the whole statement balance. Due to the $175 i was short i had to pay interest on the whole balance if not more.
Sorry not complaining at all as the $25 is nothing but an eye opener from the financial la-la land i was residing in. Would appreciate if someone can just give me a low down on this and and if this looks alright. The rep said all is in order so i guess its fine.... Still a little confused as to how i can be charged more interest than my whole balance.
Oh and if there are other financial noobs/dumbasses out there (im probabaly the only one), take time to learn this crap. Once day it'll really come handy.