Minimum Interest Charges and Residual Interest, Explained
Two small but confusing charges
A minimum interest charge (sometimes called a minimum finance charge) is a small flat amount, commonly about $1, that applies when you owe any interest at all, even pennies. Residual interest, also called trailing interest, is interest that keeps accruing on a carried balance between the statement closing date and the day your payment actually posts.
Why you can be charged after paying in full
Here is the surprise: if you carried a balance one month and paid the full statement balance the next, you can still see a small interest charge, because interest accrued daily on that balance up until your payment cleared. The statement balance did not include those last few days of interest, so it shows up on the following statement. It is not an error.
How to clear it for good
To eliminate residual interest, pay the balance and then call or check for any leftover interest a few days later and pay that final amount, or simply avoid carrying a balance in the first place so daily interest never starts. Once you are paying in full every month and in the grace period, neither charge can occur. See how interest works.
Frequently asked questions
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