Can a company continue to charge finance charges after all invoices have been paid?
I have a company who got into debt with one of their suppliers and now all of the past due invoices have been paid. Can they continue to charge finance charges on the finance charges?
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Comment by OC1999
Once the finance charges are assessed they become part of your new balance. So yes until the balance is zero they can continue to assess finance charges. It does not matter if the balance is made up the original invoice, finance charges, or late fees.
Here is a very simple example that may help.
You had a $1000 balance
You were late so with interest you now owe $1100
You pay off the $1000 so your new balance is $100
You again delay payment so they charge you another $10 in interest so you now owe $110
Until you get the balance down to zero the same cycle can continue.
Posted on September 5, 2010 at 10:51 am
Comment by Confucious Say...
Some of them can and do. You have to read the fine print in the contract. Some of them have a minimum monthly finance charge due even if you dont have a balance.
Posted on September 5, 2010 at 10:55 am