I closed my account. Can the bank continue to charge interest and fees?

Yes, you may be responsible for certain interest charges and fees.

Even though you paid off and closed your credit card account, it is possible that the bank may charge you “residual interest" for the days in the billing cycle before you paid the balance in full. Residual interest is interest that accrued, when you were not eligible for a grace period, from the first day of the billing cycle in which you paid the balance in full until the date that the bank credits your payment.

For example, you have been carrying a balance for three billing cycles. You receive your account statement reflecting a $1,000 balance. The minimum payment is $50 and it is due on the 25th of the month. You decide to pay the balance in full. The payment is credited on the 24th.

Even though you paid off the $1,000 before the payment due date, your account agreement may allow the bank to charge you for the residual interest that accrued from the first day of the billing cycle until your payment was credited on the 24th day.

Not all banks charge customers residual interest and some banks waive such interest. You should review your account agreement for information on how finance charges are calculated on your account and/or contact your lender.

Additionally, the bank generally should not charge you fees once you have closed your account unless the fees are because of something that occurred before you closed your account, such as a returned-check fee.

If you feel that the fees or interest were assessed in error, you should file a written billing error dispute within 60 days of the statement that showed the alleged error. The information on filing a written billing error dispute and the address to which the notice should be sent are listed on your periodic statement.

March 2010