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Established Contributor
rom828
Posts: 929
Registered: ‎08-17-2007

PAYMENTS APPLY TO LOWEST APR??

DH rec'd offer from BoA of 2.99% thru Sept 2010 on purchases over $250. 

 

The fine print at the bottom of the letter states " we will allocate your payments to balances with lower APRs before balances with higher APRs"

 

I thought there was something in the new CC rules eff 2-22 that disallowed crediting payments this way.

 

Evidently I've misconstrued what I've read regarding the changes  and I'm hoping someone out there can clarify!!

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Creditaddict
Posts: 18,514
Registered: ‎10-23-2007

Re: PAYMENTS APPLY TO LOWEST APR??

Any payments above minimum will be applied to higher interest rates
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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007

Re: PAYMENTS APPLY TO LOWEST APR??


Creditaddict wrote:
Any payments above minimum will be applied to higher interest rates

+1

This was what a BofA CSR explained to me several weeks ago.

So if you have a BT at 1.99%, and you make a purchase at 14.99%, and you pay more than the minimum payment for the BT, the rest goes to the new purchase. If you pay more than the BT minimum plus the full amount of the new purchase, the remainder goes back toward the BT.

So you can make purchases while you are running a low-interest balance, but if you want to make a significant dent in the low-interest part, you'll have to pay that one's minimum + full amount of new purchase + whatever extra you want to reduce the low-interest balance by. (Hope that makes sense. :smileytongue:)
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FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Valued Contributor
Uborrow-Upay
Posts: 2,710
Registered: ‎10-16-2008

Re: PAYMENTS APPLY TO LOWEST APR??

 


rom828 wrote:

DH rec'd offer from BoA of 2.99% thru Sept 2010 on purchases over $250. 

 

The fine print at the bottom of the letter states " we will allocate your payments to balances with lower APRs before balances with higher APRs"

 

I thought there was something in the new CC rules eff 2-22 that disallowed crediting payments this way.

 

Evidently I've misconstrued what I've read regarding the changes  and I'm hoping someone out there can clarify!!


 

rom828, just clarifying something here...is this a personal credit card (consumer acct) or a business credit card that your DH has?  If he has a business credit card, none of the provisions of the new laws apply to it, including the allocation of payments.

 

This is a distinction that many folks seem to overlook.

 

 

Moderator Emeritus
MarineVietVet
Posts: 14,084
Registered: ‎07-14-2009

Re: PAYMENTS APPLY TO LOWEST APR??


Uborrow-Upay wrote:

 


rom828 wrote:

DH rec'd offer from BoA of 2.99% thru Sept 2010 on purchases over $250. 

 

The fine print at the bottom of the letter states " we will allocate your payments to balances with lower APRs before balances with higher APRs"

 

I thought there was something in the new CC rules eff 2-22 that disallowed crediting payments this way.

 

Evidently I've misconstrued what I've read regarding the changes  and I'm hoping someone out there can clarify!!


 

rom828, just clarifying something here...is this a personal credit card (consumer acct) or a business credit card that your DH has?  If he has a business credit card, none of the provisions of the new laws apply to it, including the allocation of payments.

 

This is a distinction that many folks seem to overlook.

 

 


I'm one of those overlookers. :smileyhappy:  Thanks for adding this.

Valued Contributor
Uborrow-Upay
Posts: 2,710
Registered: ‎10-16-2008

Re: PAYMENTS APPLY TO LOWEST APR??

[ Edited ]

marinevietvet wrote:   I'm one of those overlookers. :smileyhappy:  Thanks for adding this.

Anytime, Marine!  Glad it helped.

 

I'd hate to see anybody depend on their payments being applied to higher APR balances first, only to find out later on that they're stuck with paying lots of interest because they have a business credit card account that is not affected by these new laws.

 

A buzzer went off in my head when I saw OP's post about the allocation of payments.  BofA's legal team wouldn't make that kind of a mistake on a consumer disclosure, at least I don't think they would.  I just want OP to make absolutely sure of what kind of card account that actually is before moving forward with anything.  My bet is that it's a business credit card account.

 

 

 

 

 

Edited (for sloppy typing).

Message Edited by Uborrow-Upay on 02-20-2010 01:55 PM
Established Contributor
Revike
Posts: 720
Registered: ‎05-04-2007

Re: PAYMENTS APPLY TO LOWEST APR??

[ Edited ]

It's not a personal account vs. business account confusion thing. That "lowest APR first" sentence also continues to appear on BOA access check offers. DW and I receive offers every month for each of our three BOA CC personal accounts. I just received another one yesterday (the offer was dated February 2), and it still has that same "lowest APR first" sentence in the terms.

 

It simply looks like BOA will continue to state that payments are applied to "lowest APR first" on every offer they send out until February 22, and then they will change the sentence in the terms. They probably should have clarified on these offers that payments will only be applied to lowest APR first through 2/21, and then the payment application will change to conform to CCARD Act, but BOA has already sent us (and I assume everyone) other notices that cover CCARD Act changes in general ... 

 

 

Message Edited by Revike on 02-20-2010 06:07 PM
Valued Contributor
Uborrow-Upay
Posts: 2,710
Registered: ‎10-16-2008

Re: PAYMENTS APPLY TO LOWEST APR??

That's very interesting, Revike.  And you're in a better position to know what's going on with the BofA consumer disclosures, as I don't have any accounts with BofA whatsoever. 

 

I'm just suggesting that the OP makes sure of which type of card her DH has before assuming anything about payment allocations.

 

 

(It's the Felix Unger in me, I guess!)   :smileyvery-happy: 

Established Contributor
rom828
Posts: 929
Registered: ‎08-17-2007

Re: PAYMENTS APPLY TO LOWEST APR??

Thanks all for the advices!  (I'be been away from my computer, hence the delay in my reply).

 

This is a personal card for DH.  BoA recently changed ("upgraded"--their words)  him from Platinum to Singature w/World Points.

 

We have a couple of home improvement projects we plan to start and this offer might be helpful, but we're always a little leary of BoA in light of some of the experiences we've read about here.

 

I think I understand the payment allocation as you all have explained it (minimum pyt goes to lowest, am't over minimum goes to highest).  Now I guess we have to decide if we want to take the plunge!

FICOS: TU 722(6-4-14) EQ '08 730( 6-12-14)
EX 719 (9-9-13)

Frequent Contributor
urgent_help_needed
Posts: 268
Registered: ‎01-23-2009

Re: PAYMENTS APPLY TO LOWEST APR??

Sorry for bumping this thread but I wanted to see if there was any updates on this.....My friend received the BOA promo also on a personal account (for purchases over $250 made before 3/31, the APR is 2.99% for 6 months I believe).  Since this is a promo offer I'm wondering if it has been verified officially that the portion of payments larger than the min. payment will be applied to the balance held at the regular APR first (not the balance held at the 2.99% APR)

Thank you


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