Old Navy Credit Card Payment

August 4th, 2011

 

How Old Navy Credit Card payments are calculated:

To calculate their clients’ debts Old Navy uses the method of calculations known as “Daily Balance”. This method requires calculating the daily balance and then the interest charge for each day of the billing cycle. This is done in the following steps:

1)            Calculating the daily balance: Daily Balance = The Balance in the beginning of the day + New charges and fees for that day – any payments and credit.

 

It is important to know that for the Old Navy Credit Card credit insurance premium and debt cancellation fees are not included in the balance subject to interest charge, whereas for the Old Navy Visa they are included. Also, for the visa card, the cash advances fee, the balance transfer fee and the fees for foreign transactions are included in their respective balances.

Fees for late payment cards, added in the current billing cycle for both types of credit cards, are treated as new purchases.

2)            Calculating the daily rate: The Daily rate = APR/365, where APR = Prime rate + 19.74%

3)            Calculating the interest charge: Interest Charge = Daily Balance * Daily rate.

4)            Calculating the balance for the next day: Balance at the beginning of the day = Daily Balance for the previous day + Interest Charge on it.

5)            Calculating the interest charge for the billing cycle: Interest charge for the billing cycle = ? (Interest charges for every day).

 

Since the annual percentage rate for these credit cards is dependant on the prime rate stated in The Wall Street Journal and it is a variable, it is essential to be noted that if the prime rate increases then the APR will increase too, and with it, the total minimum payment and the number of payments it will take to pay off the debt. GE Money Bank states that changes in prime rate will take effect on the first day of the billing cycle after the change is published.

 

There is no interest charged during a billing cycle on any purchases if the cardholder has no balance at the beginning of the billing cycle or if he/she had one but paid it in full by the due date of the billing cycle. If a cardholder has a balance subject to interest, an earlier payment may reduce the amount of interest he/she will pay.

 

Another tricky step is calculating the total minimum payment. Usually the total minimum payment is equal to: $10 or 1/20 of the new balance + any past due amount + any payment due in connection with a specific promotional purchase.

 

This will be the calculation of the total minimum payment also if the client is charged with a late payment fee during a billing cycle. However, for this to be the calculation, the card holder should for the next four months pay at least the total minimum payments (TMP). The TMP should be at least equal to the interest billed on the statement each month + 1% of the new balance + the late payment fee on the statement before the four month period.

 

If the total minimum payment is not equal to the above sum then the cardholder have to pay a TMP = ? (1% of the new balance, interest and any late payment fee in the current billing cycle, any past due payments, any payments for specific promotional purchases).

Old Navy Visa cards can be used for cash withdrawals in US dollars or other currency.

 

However, when currency conversion is needed, Visa uses either a chosen rate from the wholesale currency markets, which may differ from the one Visa, itself, receives, or the government – mandated rate in effect for the applicable central processing date. This may result in a higher rate.

 

Types of penalty fees

v    Late payment fee – If the total minimum payment is not paid until 5pm ET on the due date. It is dependant on the balance:

§  No late fee on balances up to $14.99;

§  $15 on balances from $14 to $29.99;

§  $25 on balances from $30 to $99.99;

§  $29 on balances from $100 to %249.99;

§  $39 on balances of $250 and above

v  Transaction fees – These fees are applicable to Old Navy Visa Cards only. They include:

§   A Balance Transfer fee – applied every time the cardholder makes a balance transfer.  The fee is $5 or 3% of the amount for each transfer (whichever is greater);

§   A Cash Advance fee – fee for each type of cash advance. This fee is added to the normal fee the cardholder will be charged with by the ATM. The Cash Advance fee is either $10 or 3% of the amount, whichever is greater.

§   Fee for foreign transactions – a fee charged with every foreign transaction: 3% of the amount for each transaction.