Texas Finance Code 346.102 – Permissible Interest Rate for Billing Cycle
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(a) A revolving credit account that provides for equal billing cycles may provide for interest for a billing cycle at the rate equal to one-twelfth of the applicable annual interest rate on the average daily balance of the account during that billing cycle.
(b) In any 12-month period, billing cycles are considered to be equal if:
(1) the number of billing cycles in the period does not exceed 12; and
(2) the difference between the length of the longest and the shortest billing cycles in the period does not exceed eight days.
Terms Used In Texas Finance Code 346.102
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Revolving credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or open-end credit.) Source: OCC