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Balance Transfer Question

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Frequent Contributor

Balance Transfer Question

I just opened a BOA credit card with a 15,000 CL. I put about 400.00 on the card and was going to use the BT offer for 3500.00. What portion of my payments will go to the card and what to the BT amount?



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Message 1 of 6
5 REPLIES
Established Contributor

Re: Balance Transfer Question

It will go by the difference in interest rates between your purchase rate and BT rate.

 

The CARD Act says that CC companies must apply your payments to the highest interest rate balance first.

 

So for example if your purchases are 15% apr and BT's are 0%, all of your payment will go toward your purchases, and once the purchases are paid off, the rest of the payments will go toward your BT.

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Message 2 of 6
Frequent Contributor

Re: Balance Transfer Question

Thanks for the answer.. Right now they are both 0% purchases will end in 10 months.



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Message 3 of 6
Moderator Emeritus

Re: Balance Transfer Question

 


andre181 wrote:

It will go by the difference in interest rates between your purchase rate and BT rate.

 

The CARD Act says that CC companies must apply your payments to the highest interest rate balance first.

 

So for example if your purchases are 15% apr and BT's are 0%, all of your payment will go toward your purchases, and once the purchases are paid off, the rest of the payments will go toward your BT.


 

Not exactly.

 

When you pay more than your minimum, the excess amount goes toward paying off that higher interest rate balance before the rest of your balance.

 

 

 

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Message 4 of 6
Established Contributor

Re: Balance Transfer Question

Any amount paid ABOVE the minimum payment will be applied to the highest interest rate.

Message 5 of 6
Epic Contributor

Re: Balance Transfer Question

+1

Macy's is the only that I have seen do it a little differently.

I bought furniture on the furniture line which is 0%, then I went back and bought some more furniture which I put on my regular store card.

they actually calculate a minimum payment due for each kind of account, so even if you pay just the min. part of your payment goes to the 25% store card and then of course anything above min. goes to the 25% rate.  and the last 2 months of a promo rate on your macys they will apply your entire payment to the 0% so you can pay it off even if you have a high balance on the store card on top of the 0%

Message 6 of 6