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credit cards faq/glossary
The most common questions asked about Credits Cards.
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Credit Card Glossary
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Residual interest
definition
What does Residual Interest mean?

Residual interest is the interest which is adding up basically from those bills you haven’t paid on time each month. Unfortunately the biggest drawback of using a credit card is actually the penalty in interests you pay for whenever you are a bit late with your payments. Even if you pay on time your credit card bill, if you carry a balance, expect further penalties in the form of accruing interests you will have to pay on your next bill.

In plain words, residual interest is the interest the issuer will charge you for the period between when the bill is accounted and the actual date when your payment is received. For example, the bill is accounted on the 1st of the month, and you pay it on the 15th- so, there is a two weeks period which accumulated interest you will have to pay for. Basically the only thing you can do in order to avoid residual interest is to pay your bill due date and don’t carry a balance.
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