What is a prorated charge?

A prorated charge is a calculated amount that is adjusted based on a partial use of a service or product. It is commonly used in services like utilities, rent, or subscriptions when a customer starts or ends a service mid-cycle.

For example, if a customer signs up for a monthly subscription on the 15th of the month, they would only be charged for half of the month's subscription fee (prorated charge) before being charged the full amount the following month.

Prorated charges are typically calculated based on the number of days the service was used, dividing the total cost by the number of days in the billing cycle, and then multiplying by the number of days the service was used.

Overall, prorated charges help ensure that customers are only paying for the portion of the service they actually used, making billing more fair and accurate.