Definitions for "Average daily balance"
Keywords:  daily, cycle, divide, bills, calculate
The average daily balance is a common way for card issuers to calculate finance charges. The card issuer finds the balance each day of the billing period, adds the daily balances together and divides by the number of days in the period. The calculation includes new purchases and payments. You should refer to your credit card issuer's Cardmember Agreement for specific information and details regarding the calculation of the Average Daily Balance.
Account balances for each day of the month are added together, then divided by the number of days in the billing cycle. This is used to calculate finance charges.
An amount calculated by dividing the balance outstanding at the close of each day during the billing cycle by the number of days in that cycle. Used to calculate the interest due on the outstanding account balance.
Keywords:  account, period, over, amount, time
average amount in an account over a period of time