Vision Credit Education, Inc.

A controversial billing practice has been outlawed by the CARD Act of 2009. The interest calculation method known as double-cycle billing will no longer apply to credit card accounts. The effective date is February 22, 2010.

How Double-Cycle Billing Works

I experienced the frustration of double-cycle billing on a gas card that I use. The card itself is great, providing me with a 15 cent cash rebate on all gasoline purchases.

One month my bill did not arrive, probably due to a mail delivery problem. In order to protect my credit against such potential problems, I have the account scheduled to automatically send a payment each month before the expected due date with an amount that would mostly pay off an average month’s bill.

The bill itself was around $220, and I had automatically paid $200 on the bill. When I discovered what the actual amount was a few days later, I promptly paid the remainder via online banking. That remainder was paid a couple of days after the due date, meaning that that roughly $20 was rolled over to the next month.

In the next month’s bill, I noticed finance charges that were calculated using an average balance method that covered a two month period. Even though I paid off all but about $20, I incurred finance charges on a much larger amount. Fortunately for me, the card itself has a low interest rate.

Why it Was Eliminated

Double-cycle billing was identified as one of the practices commonly used by credit card issuers that heavily favored the issuers rather than the cardholders. It was included as one of the provisions in the CARD Act of 2009.

Some provisions of the CARD Act were implemented in August 2009. However, the remainder including this ban on double-cycle billing methods were given an effective date of February 22, 2010.

This practice will undoubtedly not be missed by consumers. This little victory for the consumer can be attributed to such advocates as Consumers Union and the Center for Responsible Lending.