Interest Charged To Standard Purch
The line item INTEREST CHARGED TO STANDARD PURCH is the compound interest charged to an unpaid amount in the balance calculated on the basis of the corresponding APR.
It is an interest paid on your credit card balance for operations with merchants (purchases) that were performed but not completely paid, leaving an outstanding balance that will accrue interest according to the corresponding APR.
For example, let’s say you owe $1,320 on a credit card, and because you did not pay that $1,320 in full you were charged a purchase interest charge of $100. The line item will read INTEREST CHARGED TO STANDARD PURCH 100 (debited).
You now owe $1,420, and then the next month’s purchase interest charge will be calculated based on a balance of $1,420. So the interest will aggregate to the previous debt
If you do not pay off your balance each billing cycle, what is normally one month, a purchase interest charge for the unpaid amount then becomes part of the total balance owed.
This is called compound interest and can lead to a cycle of credit card debt. The interest charges continue to accrue if you are not paying your balance in full every month.
How To Stop Purchase Interest Charge
You will be charged interest if you pay less than the full balance or pay after the payment due date.
The only sure way not to pay a purchase interest charge is to pay your credit card balance in full each month.
If you pay off the entire balance owed on the credit card by the due date, you will not be charged interest on your purchases.
Note that cash advances and balance transfers have no grace period, which means they start accruing interest as soon as the transaction is made. By carrying a balance, you sacrifice the grace period.
You can make a payment toward your balance due at any time of the billing cycle or month. You do not have to wait until the due date. Since interest is commonly calculated daily, making multiple smaller payments rather than one large payment on the due date is one way to decrease the amount of interest you might owe at the end of the billing cycle. This can be a good strategy to use if you do not pay your credit card bill in full each month. You will still owe some interest, but it may be less.
For a temporary reprieve from paying an interest charge on purchases, you might look for a credit card that has an introductory 0% APR. Some credit card issuers offer introductory rates for anywhere from 12 to 18 months for qualified applicants. If you make a plan for paying off the balance before the promotional period ends and you’re diligent about sticking to it, you could forgo paying interest on purchases made during that period.
Some people might choose this strategy rather than taking out a personal loan for a specific purchase. If you’re sure you can pay the balance in full while the APR remains at 0%, it could be a good strategy.
Anyway, when you receive a statement with the entry INTEREST CHARGED TO STANDARD PURCH, check the amount and give their customer service a call and dispute it if you consider that the statement is wrong.
OFFER 04 MOVED TO STANDARD PURCH
The entry OFFER 04 MOVED TO STANDARD PURCH gives us a heads-up that the promotional rates we were enjoying (0% APR with OFFER 04) are now finished and outstanding balances will accrue interest as standard purchases (STANDARD PURCH entry).
When you see that line item on your statement, try not to leave outstanding balances that can accrue interest at a standard APR rate.