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How does the credit card finance charge work?

Find out how your credit card calculates finance charges

When you are conducting credit card comparisons, make special note of how often each credit card company calculates finance charges. You'll find that most credit cards will calculate finance charges in one of four ways: with an average daily balance, a daily balance, a two-cycle balance, or a previous balance. Check with your credit card company to see which method they use.

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