Residual Credit Card Interest (Wells Fargo, pay, dispute, accounts)

[rogead]

I recently found myself in a position to pay off a few bills. It was a great feeling until I realized that two of the accounts reflected an additional charge on the next billing cycle. I called them for an explanation. The answer: "residual interest".

Residual interest is interest charged on a balance between the time a billing statement comes out, and the time payment is made. While this practice is not illegal, it is highly deceptive.

Not all banks engage in applying residual interest charges. Among larger institutions, Wells Fargo, Capital one, and Citibank do. In my case, the representative of the first bank I called credited the charges without any prompting from me. With the second bank, that offer was made only after I threatened to close the account and dispute those charges.

In spite of attempts by consumer credit advocates to force banks to either forgo this practice or to be more transparent about it, most banks that do it provide little or no information about the process.

[old_cold]

If your phone bill is figured on the first,due on the 20th and you pay on the 20th,but did not cancel service until the 15th, you will owe for the service from the 1st until the 15th.
Even though it is easier to understand with the phone bill, the theory is the same.
You were given a courtesy credit for it because it doesn't seem to make much sense to be told you owe a certain amount and not have it be correct.
(I think I got this right

[harry chickpea]

Yeah, figured that out a while back. I add a couple of extra bucks so that I overpay, then let it sit so they have to keep sending statements. They are too greedy to cut a check for the overpayment, so they spend an extra $5 in billing and postage on what would otherwise be a zero balance. Makes me smile.

[old_cold]

Originally Posted by harry chickpea

Yeah, figured that out a while back. I add a couple of extra bucks so that I overpay, then let it sit so they have to keep sending statements. They are too greedy to cut a check for the overpayment, so they spend an extra $5 in billing and postage on what would otherwise be a zero balance. Makes me smile.

I doubt it has anything to do with greed....just computers.
I have a couple of CC companies that continue to send 0 balance statements for a few months after last payment due some service accounts just continue as long as the account isn't cancelled.