Two Cycle Billing

If you’re in a position to close some of your credit cards, you’ll want to be aware of this practice. Most credit card companies do it - it’s called “two-cycle billing”.  What this means is that you get charged interest on balances two months back, not just one. If you pay a card down to zero in May, look for a bill in June, for April’s interest.  Almost all of them do it.  What this means is that you don’t have a closed-out card until you have two consecutive zero-balance bills. Not just one. 

So if you pay off the balance on your statement and then call to close your account, it won’t close because of the interest that will hit.  Even though  the person on the phone tells you they closed it, it won’t be closed becaused it’ll “wake up” when the interest hits the balance.

Your best bet is to pay off your card and then let it sit for two cycles until ALL the interest and charges are completed.  You can then call or write to close the card with confidence that it’ll actually happen.

Rich