topic Re: Lesson in credit... in Credit Cards

Lesson in credit...

Kennie02 — Sat, 07 May 2016 17:56:04 GMT

I just got off the phone with BofA.... I am not thrilled... I had a promotional APR on my card for purchases which expired on 3/4/16. A few months ago they sent me a BT promo offer. I took advantage of it. I made extra payments to make sure that my purchase promo balances was paid off prior to the expiration of 3/4/16. I PIF this balance in 12/2015 or so I thought. I noticed that I had been charged interest this last statement period. After a failed chat and two reps over the phone I ultimately learned that I was set up to pay interest. Apparently, when I make payments over the minimum payment, they are automatically allocated to the larger balance. Obviously my BT of $2000 was larger than my balance of $800. So when I made my payments to cover the purchase balance and then some these payments were applied to my BT. The rep said these payment allocation rules are set by the gov't and even if I called I would not be able to indicate which balances I wanted my payments applied to. I find this difficult to believe because I have never had a problem doing so. However, my experience is limited to my Amazon Store Card and other store cards. Anyway, now that I am being charged interest I get to pay off this balance first. Needless to say, I will not be taking any of their BT offers, making any purchases until the current BT offer is up... I don't want to be told of a new rule later...

Re: Lesson in credit...

baller4life — Sat, 07 May 2016 18:29:58 GMT

Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.

Re: Lesson in credit...

Kennie02 — Sat, 07 May 2016 18:32:48 GMT

Thanks baller... I don't either but apparently I shouldn't put a BT on a card w/ a balance either. Whether that balance has a promo on it or not... Lesson learned...

Re: Lesson in credit...

woodyman100 — Sat, 07 May 2016 18:37:00 GMT

What baller4life said

Re: Lesson in credit...

woodyman100 — Sat, 07 May 2016 18:38:11 GMT

Kennie02 Iv'e had to learn the same lesson. Welcome to the club 😜

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 18:54:31 GMT

@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.

I also have a BoA card. It has 21 months 0%APR on BTs. I will ONLY be using it for BTs until that promo is over. (It has a nice APR for purchases, but not as nice as 0%)

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 19:03:04 GMT

The only "rules" I know of set by the gov. is that any payment over the minimum due is supposed to go to the balance with the highest interest. I've never heard of a rule that it has to go towards the highest balance. Sometimes I think they make up rules as they go Anyway, I usually do what baller4life suggested, the only time I don't is if the purchase APR is 0% too and it expires at the same time as the BT APR.

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 19:24:48 GMT

Wow.... that totally sucks. Lesson learned I guess...

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 20:55:41 GMT

This is exactly what banks hope will happen from the moment they issue your card. Imagine how many people fall for this, with most not even realizing it.

Thanks for the heads up OP!

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 21:12:43 GMT

@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.

I've made purchases while having a BT ongoing for both your favorite creditor Barclays and CapOne and have never had an issue or been charged interest.

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 22:38:19 GMT

OP I suggest you call Bofa to confirm what you've been told was correct. I have been told by both Chase and Discover that the way it works is, because of the rules, most CC companies apply the minimum payment due to the BT balance, and anything above that has to be applied to the portion with the highest APR (not balance as you were told.). Keep in mind that, with most CC, you lose the interest free grace period on purchases if you have BT balance. Anything you put on the card accrue interest as soon as it is posted. That may be why you were charged!

Re: Lesson in credit...

baller4life — Sat, 07 May 2016 23:16:09 GMT

@Anonymous wrote:
@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.
I've made purchases while having a BT ongoing for both your favorite creditor Barclays and CapOne and have never had an issue or been charged interest.

And how did you accomplish that Irish?

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 23:28:52 GMT

@baller4life wrote:
@Anonymous wrote:
@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.
I've made purchases while having a BT ongoing for both your favorite creditor Barclays and CapOne and have never had an issue or been charged interest.
And how did you accomplish that Irish?

Dunno Maybe they love me?

Re: Lesson in credit...

Aahz — Sat, 07 May 2016 23:52:15 GMT

@baller4life wrote:
@Anonymous wrote:
@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.
I've made purchases while having a BT ongoing for both your favorite creditor Barclays and CapOne and have never had an issue or been charged interest.
And how did you accomplish that Irish?

It's not Irish, it's Barclays and CapOne. They both permit this while BofA and Chase do not. I just quoted their terms in a different thread a few days back. The lesson to be learned is to be sure to read the BT terms at the time you initiate the transfer. Not all banks are the same.

Re: Lesson in credit...

Anonymous — Sat, 07 May 2016 23:57:04 GMT

@Aahz wrote:
@baller4life wrote:
@Anonymous wrote:
@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.
I've made purchases while having a BT ongoing for both your favorite creditor Barclays and CapOne and have never had an issue or been charged interest.
And how did you accomplish that Irish?
It's not Irish, it's Barclays and CapOne. They both permit this while BofA and Chase do not. I just quoted their terms in a different thread a few days back. The lesson to be learned is to be sure to read the BT terms at the time you initiate the transfer. Not all banks are the same.

Hey now, I preferred thinking that they love me.

But you are correct.

Re: Lesson in credit...

Aahz — Sun, 08 May 2016 00:01:15 GMT

Doesn't mean they don't love you, Irish. They just show it in other ways

Besides, the love of all us MyFICOers should be enough to warm your heart.

Re: Lesson in credit...

Sbrooks1 — Sun, 08 May 2016 00:37:50 GMT

🙄🙄🙄 attitude doesn't affect credit score! Thank goodness

Re: Lesson in credit...

Namaste7 — Sun, 08 May 2016 00:44:10 GMT

@Kennie02 wrote:
I just got off the phone with BofA.... I am not thrilled... I had a promotional APR on my card for purchases which expired on 3/4/16. A few months ago they sent me a BT promo offer. I took advantage of it. I made extra payments to make sure that my purchase promo balances was paid off prior to the expiration of 3/4/16. I PIF this balance in 12/2015 or so I thought. I noticed that I had been charged interest this last statement period. After a failed chat and two reps over the phone I ultimately learned that I was set up to pay interest. Apparently, when I make payments over the minimum payment, they are automatically allocated to the larger balance. Obviously my BT of $2000 was larger than my balance of $800. So when I made my payments to cover the purchase balance and then some these payments were applied to my BT. The rep said these payment allocation rules are set by the gov't and even if I called I would not be able to indicate which balances I wanted my payments applied to. I find this difficult to believe because I have never had a problem doing so. However, my experience is limited to my Amazon Store Card and other store cards. Anyway, now that I am being charged interest I get to pay off this balance first. Needless to say, I will not be taking any of their BT offers, making any purchases until the current BT offer is up... I don't want to be told of a new rule later...

To avoid interest, you would have needed to pay off the entire balance as payment allocation rules would not have applied a lump payment wholly to the BT/promotional rate when a purchase balance exists; excess payments over the minimum are allocated to balances with different interest rates. So as long as you had a purchase balance subject to the standard agreement rate, that balance would receive a payment allocation each payment. This differs from deferred financing offers where payments can be applied wholly to that amount to avoid interest before the end of the financing period.

I'm surprised BofA was not willing to provide some adjustment. I've found them to be reasonable when requesting some level of relief.

Re: Lesson in credit...

amakol — Sun, 08 May 2016 04:25:34 GMT

@Aahz wrote:
It's not Irish, it's Barclays and CapOne. They both permit this while BofA and Chase do not. I just quoted their terms in a different thread a few days back. The lesson to be learned is to be sure to read the BT terms at the time you initiate the transfer. Not all banks are the same.

How can B of A and Chase be against this?

Allocating payment above the minimum to the highest interest rate first can't be denied by terms of service or cardholder agreements.

Yes, I know big banks don't hesitate to "misinterpret" the law but this would be a blatant violation of the CARD act.

Re: Lesson in credit...

grillandwinemaster — Sun, 08 May 2016 15:22:01 GMT

@Anonymous wrote:
@baller4life wrote:
@Anonymous wrote:
@baller4life wrote:
Sorry OP. That is exactly why I don't make purchases on a card with a bt balance. I sd it.
I've made purchases while having a BT ongoing for both your favorite creditor Barclays and CapOne and have never had an issue or been charged interest.
And how did you accomplish that Irish?
Dunno Maybe they love me?

Luck of the Irish!☺