Common use of Method of Computing the Finance Charge Clause in Contracts

Method of Computing the Finance Charge. The total finance charge for a billing cycle is the finance charge imposed on Credit Purchases plus the finance charge imposed on Cash Advances. (a) Cash Advances-Average Daily Balance (Including New Advances). A finance charge will be imposed on Cash Advances from the date made or from the first day of billing cycle in which the Cash Advances are posted to Cardholder's account, whichever is later. The finance charge on Cash Advances for a billing cycle is computed by applying the monthly periodic rate to the average daily balance of Cash Advances for the billing cycle, which is determined by dividing the sum of the daily balances by the number of days in the billing cycle. Each daily balance of Cash Advances is determined by adding the outstanding unpaid balance of Cash Advances at the begin- ning of the billing cycle, any new Cash Advances posted to the account, and subtracting any payments as received or credits as posted to the account, but excluding any unpaid finance charges. If the new balance (Cash Advances plus Credit Purchases) shown on Cardholder's periodic statement for a billing cycle is paid in full before the payment due date, no additional finance charges will be imposed.