Common use of Average Daily Balance Method Clause in Contracts

Average Daily Balance Method. (Including Current Transactions). We figure the finance charge on your account by applying the periodic rate to the “average daily balance” of your account (including current transactions). To get the “average daily balance” we take the beginning balance of your account each day, add any new purchases, advances, or loans, subtract any payments or credits, and add unpaid finance charges. This gives us the daily balance. Then, we add up all the daily balances for the billing cycle and divide the total by the number of days in the billing cycle. This gives us the “average daily balance.”