Can interest on a credit card debt be continued until the balance is paid off,even after the card has been canceled?

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Can interest on a credit card debt be continued until the balance is paid off,even after the card has been canceled?

I am being sued by a credit card company for a past debt. The limit on the card has been paid however the company is suing me for $800 of interest that was added after the card had been canceled. The firm states that I will lose this case because this legal?

Asked on March 30, 2011 under Bankruptcy Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Even after the card has been cancelled, the account will keep on accruing interest at the same rate--or possibly a higher rate even, if the card agreement had (as many do) a term or condition increasing the interest rate in the event of default. So even when you may no longer use a card or borrow new money from it, whatever balance is on the account will continue to accrue interest. While you can (and should) double check their calculations to make sure you're not being overcharged--and you should also ask the credit card company to break down for you exactly how that amount is arrived at--in principal, there is no reason why an account holder would not be responsible for additional interest on an outstanding balance when the card was canceled, unfortunately.


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