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Average daily balance

This is the most common method used by credit card issuers for calculating the payment due. The average daily balance is calculated by adding each day's balance (charges minus any credits), and dividing by the number of days in the billing cycle. The average daily balance is then multiplied by the card's monthly periodic rate (the APR divided by 12) to calculate the finance charge for the month.


Previous Merchant Account Term: Available Credit

Next Merchant Account Term: Bad Credit


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