Adjusted Balance Method

Written by:
Image
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

View all posts
Updated January 16, 2021

What is Adjusted Balance Method?

The adjusted balance method determines the finance charges on an account once all credits and debits for the accounting period have been posted.

How Does Adjusted Balance Method Work?

The adjusted balance method is used to determine the periodic finance charges on an account, such as a bank or credit card account. This method calculates charges based on the account activity in a given period as reflected in the total of all posted debits and credits. Once all of these transactions have been posted, the finance (interest) charges for the period in question are calculated.

Why Does Adjusted Balance Method Matter?

The adjusted balance method results in lower finance charges to the account holder than other methods because it uses the sum of monthly activity on an account at the end of an accounting period as its basis.

Ask an Expert about Adjusted Balance Method
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Adjusted Balance Method.
Be the first to ask a question

If you have a question about Adjusted Balance Method, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Adjusted Balance Method, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Adjusted Balance Method

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms