by 
The Curious Bag
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Different credit card companies utilize different methods of calculating the interest charges on your account. It is important to understand how your company calculates the interest so you can minimize the charges on your card.
Types
Credit cards may use one of the following methods: adjusted balance, average daily balance, previous balance, ending balance or two-cycle average daily balance.
Purpose
The size of the interest charges on credit cards depends on how large of a balance you carry on your card. These methods are used to determine what amount the interest is charged on.
Time Frame
Most methods only take into consideration your balance, payments and purchases from the last billing cycle. However, if your company uses the two-cycle average daily balance, the daily balances from the previous two cycles are used.
Considerations
Some methods, like the average daily balance, take into consideration the payments you make and the charges you incur during the billing cycle. However, the previous balance method makes no adjustment for payments or charges.
Function
Some methods, like the ending balance method, are not affected by when during the cycle purchases or payments are made. Others, like the adjusted daily balance method, take into account when during the cycle charges or payments were made when calculating your average balance.
Source:
Financial Web: How Credit Card Finances Charges are Calculated
University of Maryland University College: How Does Your Credit Card Calculate Interest?
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