The highest periodic interest rate will be charged on a credit card statement that ends on a month with 31 days.
This is because:
- Credit card interest is calculated by applying the periodic interest rate to the average daily balance over the billing cycle.
- The average daily balance is the sum of all daily balances divided by the number of days in the billing cycle.
- The more days in the billing cycle, the higher the average daily balance will be (assuming card usage remains similar across months).
- Therefore, for equal amounts spent, the average daily balance will be highest for billing cycles ending in months with most days.
- Months with 31 days (January, March, May, July, August, October, December) will have the highest average daily balance compared to 30-day or 28/29 day months.
- With a higher average daily balance, the periodic interest charge applied will also be higher.
In summary, for a credit card billing cycle ending on the last day of a month, the highest periodic interest rate will be charged on 31-day months like July or October, as they will have the highest average daily balance during the billing period.