of great concern to governments regulating credit card loans. Today, in many cases because of strict laws, most card issuers do not charge any pre-payment penalties at all (except those that come naturally from the interest calculation methodsee the section below). That means cardholders can "cancel" the loan at any time by simply paying it off, and be charged no more interest than that calculated on the time the money was borrowed. Cancelling loans Cardholders are often surprised in situations where the bank cancels or changes the terms on their loans. Most card issuers are allowed to raise the interest rate (within legal guidelines) at any time. Usually they have to give some notice, such as 30 or 60 days, in writing. If the cardholder does not agree to the new rate or terms, then it is expected that the account will be paid off. That can be difficult for a cardholder with a large loan who expected to make payments over many years. Banks can also cancel a loan and request that all amounts be paid back immediately for any default on the contract whatsoever, which could be as simple as a late payment or even a default on a loan to another bank (the so-called "Universal default") if the contract states it. In some cases, a borrower may cancel the account within the time allowed without paying off the account. As long as the borrower makes no new charges on the account, then the borrower has not "agreed" to the new terms, and may pay off the account under the old terms. Average daily balance The sum of the daily outstanding balances is divided by the number of days covered in the cycle to give an average balance for that period. This amount is multiplied by a constant factor to give an interest charge. The resultant interest is the same as if interest was charged at the close of each day, except that it compounds (gets added to the principal) only once per month. It is the simplest of the four methods in the sense that it produces an interest rate approximating if not exactly equal the expected rate. Adjusted balance The balance at the end of the billing cycle is multiplied by a factor in order to give the interest charge. This can result in an actual interest rate lower or higher than the expected one, since