Payments & Interest
Details about making payments and interest you may incur for using your card.
Instructions for Making a Payment
- You must pay us in U.S. dollars. All checks must be drawn on funds on deposit in the U.S
- You must pay us for all amounts due on your Account. This includes charges made by Authorized Users.
- We may refuse to accept a payment in a foreign currency. If we do accept it, we will charge our cost to convert it to U.S. dollars.
- We can accept late payments, partial payments or payments marked "payment in full" or with any other restrictive endorsement without losing any of our rights under this Agreement.
- We credit your payments in accordance with the terms contained on your billing statement.
- If you mail your payment to an address other than the address designated on your billing statement, there may be a delay in processing and crediting the payment to your Account.
Minimum Payment Due
In order to avoid a late fee, you're required to pay at least the Minimum Payment Due each month. You can find your Minimum Payment Due by logging in to the Account Center or on your statement.
Your Minimum Payment Due is based on a number of factors such as your outstanding balance, APRs, as well as any late fees and past due amounts. Because these factors can vary, so can your Minimum Payment Due.
You may pay the entire New Balance shown on your billing statement at any time. Each billing period you must pay at least the Minimum Payment Due by the Payment Due Date shown on your billing statement.
The Minimum Payment Due may also include amounts by which you exceed your Account credit line. It will never exceed the New Balance. When we calculate the Minimum Payment Due, we may subtract from the New Balance certain fees added to your Account during the billing period. The Minimum Payment Due is rounded up to the nearest dollar.
How We Apply Payments
Generally, your Minimum Payment Due is first applied to balances with lower APRs and then to balances with higher APRs. Usually, the opposite can be said for any payment amount in excess of your Minimum Payment Due, which is applied to balances with higher APRs first, and then to balances with lower APRs.
We apply payments and credits at our discretion, including in a manner most favorable or convenient for us. In all cases, we will apply payments and credits as required by applicable law. Each billing period, we will generally apply amounts you pay that exceed the Minimum Payment Due to balances with higher APRs before balances with lower APRs as of the date we credit your payment.
How We Calculate Interest Charges—Daily Balance Method (including current transactions)
We calculate interest charges each billing period by first figuring the "daily balance" for each Transaction Category. Transaction Categories include standard Purchases, standard Cash Advances and different promotional balances, such as Balance Transfers.
How We Figure the Daily Balance for Each Transaction Category
- We start with the beginning balance for each day. The beginning balance for the first day of the billing period is your balance on the last day of your previous billing period.
- We add any interest charges accrued on the previous day's daily balance and any new transactions and fees. We add any new transactions or fees as of the later of the Transaction Date or the first day of the billing period in which the transaction or fee posted to your Account.
- We subtract any new credits and payments.
- We make other adjustments (including those adjustments required in the "Paying Interest" section).
How We Figure Your Total Interest Charges
- We multiply the daily balance for each Transaction Category by its daily periodic rate. We do this for each day in the billing period. This gives us the interest charges for each Transaction Category. To get a daily periodic rate, we divide the APR that applies to the Transaction Category by 365.
- We add up all the daily interest charges. The sum is the total interest charge for the billing period.
How We Include Fees
We add Balance Transfer Fees to the applicable Balance Transfer Transaction Category. We add Cash Advance Fees to the applicable Cash Advance Transaction Category. We add all other fees to the standard Purchase Transaction Category.
- First, it's important to understand what "interest charge" means. Interest charges can be incurred when using a credit card and include things such as interest cost, which is the amount of money you pay as interest charges on your Discover card.
- Different types of transactions such as purchases, cash advances, and promotional offers can have different APRs. You can log in to the Account Center to view your actual APRs, or you can request your Cardmember Agreement by mail. Please note that the APRs provided in this interactive guide are for illustrative purposes only.
- Interest charges are calculated each day using a formula which is often as basic as multiplying each of the daily balances by its daily periodic rate. That gives us the interest charges for each day. We then add up the daily interest charges to get the total for the billing period.
Basically, if you pay the New Balance shown on your statement each month on time, then you don't pay interest on purchases. This is what we call our "Grace Period." Just remember, we extend a Grace Period to purchases only, not to cash advances or balance transfers, which start incurring interest from the date of the transaction.
When Interest Charges Begin
We begin to impose interest charges on a transaction, fee or interest charge from the day we add it to the daily balance. We continue to impose interest charges until you pay the total amount you owe us. You can avoid paying interest on Purchases as described below. However, you cannot avoid paying interest on Balance Transfers or Cash Advances.
How to Avoid Paying Interest on Purchases ("Grace Period")
If you paid the New Balance on your previous billing statement by the Payment Due Date shown on that billing statement, we will not impose interest charges on new Purchases, or any portion of a new Purchase, paid by the Payment Due Date on your current billing statement. New Purchases are Purchases that first appear on the current billing statement.
How We Apply Payments May Impact Your Grace Period
If you do not pay your New Balance in full each month, then, depending on the balance to which we apply your payment, you may not get a grace period on new Purchases.