About Trailing Interest

Trailing interest is considered by many to be sneaky and unfair, because it utilizes a method of computing balances that leaves a consumer still owing interest after they presume a card’s entire balance has been paid in full.

How this works is that interest is calculated and charged up until the day of a complete payment. If a consumer receives their statement with an end date of, say, the last of the month on the 15th of the next month, they may reflect on the fact that they have made no charges since the 31st, and send off a check for the total balance listed on the bill. Next month, they will receive a final bill for the interest accrued since up until the 18th, when the payment was cleared and the account was credited. Because the creditor calculated the interest this way, rather than on a typical monthly basis, the customer is left owing more after they had perceived the card to be paid off.