topic Re: Any idea how payments are applied? in Credit Cards

Any idea how payments are applied?

Anonymous — Thu, 15 Nov 2018 15:39:35 GMT

I recently transferred some balances over to a new 5th 3rd card since they gave me a 0% offer. I also just used this card for a purchase of $60 (purchases are at my regular rate). If I send in a payment of $100, will they apply it to the 0% balance transfer or the purchase first?

Re: Any idea how payments are applied?

FinStar — Thu, 15 Nov 2018 15:53:45 GMT

I would suggest reading the CCA that came with your new 5/3 card and that should provide more insight on how that applies for both. You can also contact them directly.

Re: Any idea how payments are applied?

NRB525 — Thu, 15 Nov 2018 16:58:54 GMT

After the banking regs updates, the payments should be applied:

The minimum payment goes to the lowest APR balance first. So your minimum payment this cycle goes to the 0%.

Amounts over the minimum payment apply to the highest APR, then as those are paid off, are applied to the next lower APR balances.

If you have already made your minimum payment this month, the $100 should apply / pay the $60 charge at regular rate.

Make the payment, and then check the next statement. The different tranches of 0% and full rate balances are kept separate in a part of your statement. If the regular APR balance still shows a remaining balance on the statement, make a quick payment of the minimum due, plus that purchase APR balance, plus a little more to try to fully erase it. If you start getting minimum interest charges, continue, but in some cases a call to the bank may be necessary to end minimum interest.

Re: Any idea how payments are applied?

Anonymous — Thu, 15 Nov 2018 19:39:28 GMT

Thank you!

Re: Any idea how payments are applied?

Shooting-For-800 — Thu, 15 Nov 2018 20:23:08 GMT

I would quit using the 0% card to simplify things.

Cap One tells you exactly how much the minimum payment is to avoid paying interst each month based on your balances at each rate.

I would look for something in writing that explains exactly what is going to happen.

Perhaps if you pay at least twice your reg apr balance each month you would avoid the risk of paying any interest. that should pay off the reg apr balance whether it is applied first or second.

Re: Any idea how payments are applied?

frugal47374 — Fri, 16 Nov 2018 15:47:57 GMT

I agree keeping purchases separate from your 0% transfer card is best.

I don't know 5th 3rd's rules, but Citi says: Any use of this offer is a balance transfer. If you use this offer, interest will be charged on purchases made with your credit card in subsequent billing periods unless you pay the New Balance shown on your statement (including the amount of your balance transfer) in full by the payment due date each billing period, or those purchases have a 0% APR.

So you give up your grace period and will pay interest on any purchase. So if avoiding interest on your purchases is important, read the agreement very carefully or call them to clarify.