Issue with BofA allocating payments to BTs

[lhcole77]

Contacted BofA this morning to inquire about how payments are allocated when there is more than one BT promotion on my card. I was told that payments "are allocated to the oldest transfer first, essentially the transfer that expires first." Once that is paid off, payments are then applied to the next transfer (if there is more than one) and so on and so forth.

Turns out there was an issue at some point in their system and payments were not being allocated this way. They were being spread across BT promos. (ETA: A manager is reviewing my account and will correct the errors)

If any of you have more than one BT promo on your BofA card I suggest reviewing your statements and balances. You can contact BofA via online chat to find out outstanding balances on each and all offers (since those aren't listed at the bottom of the statement).

Knowing this will come in handy when/if it's time to transfer any outstanding balance(s) using another BT promo.

(Note: I'm only carrying BTs on my card. Allocation method is different when there are purchase balances and BT balances or when there are different APR levels for those balances)

[PrimeRate]

Thanks for the heads up! Did they end up applying the payments correctly after you pointed this out? 

[lhcole77]

The CSR escalated to her manager and he/she will be correcting the error. 

Also suggested they add these balances at the bottom of the statements. The BTs I have with other lenders do this on their statements. Very helpful.

[PrimeRate]

Keep us posted on whether or not they see this through. I never really trust the whole "escalating this to a higher up to do later" bit. A lot of the times these front line CSR's have maximum call times to abide by(especially the 3rd party reps - which unfortunately almost every company uses) and it's an easy way to get someone off the phone. Hope everything works out for you.

[lhcole77]

10-4, good buddy!

P.S. When I logged into my account there was yet ANOTHER BT offer. A 20 month offer. They love pushing BTs. But, hayyyyyy, I'm not gonna complain. 

[ddemari]

Mid June 2015 BOA was flooding me balance transfer checks and everytime i logged into the online site, new balanace transfer promos. They even lowered my apr for non bt purchases. 

So I took advantage of the promo. I had always PIF my cash rewards visa sig. OPened since early 2013. FICO in the 720's. 

After I did the BT's, Boa closed my card for excessive new accounts. I was livid( feeling a little entitled) but now im over it lol. Good luck. 

[onstar]

Under the CARD Act, the bank can choose to allocated the minimum payment amount however it wants. So 99% of the time, it will be to the balance that is most favorable to the bank. Then any amount paid that is above the minimum payment amount must be applied to the balance that is most favorable to the consumer. The order is (1) balance with the highest interest rate, then (2) if the interest rate is the same, then any promo balance that is expiring first, except (3) in the last 2 months of an expiring promo balance, all amounts above the minimum payment amount must be applied to the expiring balance.

So if I had:

(A) $2000 balance with 0% promo until 12/2015

(B) $3000 balance with 0% promo until 02/2017

(C) $500 balance that would be subject to 14.99%

And minimum payment due was $55.

If I paid $175, then $55 would go towards B and $120 would go towards C.

If I paid $600, then $55 would go towards B, $500 would go towards C, and $45 would go towards A.

OP, since you only have Types A & B in your account, the minimum payment due will be applied to Type B (expiring later) and all amounts greater than the minimum will be applied to Type A (expiring sooner).

[lhcole77]

---

@onstar wrote:

Under the CARD Act, the bank can choose to allocated the minimum payment amount however it wants. So 99% of the time, it will be to the balance that is most favorable to the bank. Then any amount paid that is above the minimum payment amount must be applied to the balance that is most favorable to the consumer. The order is (1) balance with the highest interest rate, then (2) if the interest rate is the same, then any promo balance that is expiring first, except (3) in the last 2 months of an expiring promo balance, all amounts above the minimum payment amount must be applied to the expiring balance.

So if I had:

(A) $2000 balance with 0% promo until 12/2015

(B) $3000 balance with 0% promo until 02/2017

(C) $500 balance that would be subject to 14.99%

And minimum payment due was $55.

If I paid $175, then $55 would go towards B and $120 would go towards C.

If I paid $600, then $55 would go towards B, $500 would go towards C, and $45 would go towards A.

OP, since you only have Types A & B in your account, the minimum payment due will be applied to Type B (expiring later) and all amounts greater than the minimum will be applied to Type A (expiring sooner).

---

Thanks for that awesome breakdown. 

I disagree with this --> "OP, since you only have Types A & B in your account, the minimum payment due will be applied to Type B (expiring later) and all amounts greater than the minimum will be applied to Type A (expiring sooner)."

I compared my starting amounts with my current balances (I have 4 promos on the card). The first two promos had misalloacted payments and the second two did not--those balances were still at the same amount as the beginning. BofA's system had an error on the first two. The system's glitch was corrected before I took the second two. The system did not go back, however, and correct the allocation on the first two, hence the escalation to a manager.

As stated above my card has no purchase balances on it. It has 100% BT promo balances on it. All promos at 0%. And per BofA, 100% of payments (in situations like the one I have) are to be allocated towards the oldest BT promo balance.