topic Re: WF "trailing interest"/minimum interest fee in Credit Cards

WF "trailing interest"/minimum interest fee

cr101 — Thu, 29 Dec 2022 15:30:35 GMT

This was more of a warning/rant, but I'd also like to get your take on this.

I had a 0% APR BT offer that I was using.

I made a purchase after that. BT bal was still on my card. The rep agreed with me that as long as I paid off the purchase by the next statement's due date, I would not be charged interest. Wrong. I was charged interest from the transaction date. They waived the interest charge after I explained that their rep gave inaccurate info. Great.

The next month, I was charged interest, but IIRC, the rep explained that it was trailing interest. He even told me that I could avoid that in the future by calling to get the exact amt that I had to pay. After our call, I paid what he told me would help me avoid the trailing interest issue. I actually paid above that to account for the interest for the few days between the statement and the date that I called.

The next month, I was hit with a "minimum interest fee". It's just a $1, but when I notice these things, especially when they're this small, it makes me wonder how many other customers are not noticing while the bank is profiting off of what I consider a glitch or scam.

So, I wanted them to explain this fee. They did refund it, but I still asked the guy to justify the fees. He went over all of the charges and my payments. I think that by the end, even he was confused and said, "That's just the way the system works. If you want to file a complaint..." 😡 That's just the way the system works???!! That is so not an acceptable answer, especially when you're dealing with money. That ticked me off.

Their site clearly states, "Generally, we will apply your Minimum Payment first to lower APR balances (such as Purchases) before balances with higher APRs (such as Cash Advances). Payments made in excess of the Minimum Payment will be applied to balances with higher APRs first before balances with lower ones."

There appears to be a discrepancy about how the payments are applied.When the rep transferred me to their escalations team today, the rep read me a statement (and she made sure to mention that I may not have heard it when it was read to me on previous calls...It was never read to me. 🙄). Her statement claims that they apply payments to balances with the lowest APR or higher dollar amount first. That's completely different than what's on their site and what the first rep told me last month. In fact, she went further to say that there's not even a way for me to avoid future interest on the purchase bc their system has no way to allocate payments to certain balances, and that I still have a purchase balance. Last month, my statment displayed a purchase balance of about $6. I paid almost $300 above my min payment. There's no way that I should still have a purchase balance, but I do. I'm waiting on a response from their escalations team.

What's really sad is that each of the last three reps that I tt all stated that the previous rep that I tt gave inaccurate or incomplete info. That's not good.

Re: WF "trailing interest"/minimum interest fee

sznthescore — Thu, 29 Dec 2022 15:38:49 GMT

Typically, you have 25 days from when the statement cut with any new charges to pay it off without interest. If that balance isn't paid in full before the next statement cut is when interest starts accruing on any unpaid balance from the previous months balance.

Now, with my Apple Card I've noticed that if I don't pay my balance in full for that month, I'll incur interest similar to your current situation. Just food for thought, but since I know that's their system, I deal with it but you have a point if this is what they're doing now. 🤔

Re: WF "trailing interest"/minimum interest fee

Anonymous — Thu, 29 Dec 2022 17:10:49 GMT

I wouldn't usually expect a CSR to explain very much about policies. I agree the minimum interest fee doesn't appear to make sense (they know the amount, just charge it). No help to you, this is more than offset by all those making use of the small balance trick, where small amounts are forgiven every month by certain issuers.

Re: WF "trailing interest"/minimum interest fee

Remedios — Thu, 29 Dec 2022 19:56:25 GMT

@cr101 wrote:
This was more of a warning/rant, but I'd also like to get your take on this.

I had a 0% APR BT offer that I was using.

I made a purchase after that. BT bal was still on my card. The rep agreed with me that as long as I paid off the purchase by the next statement's due date, I would not be charged interest. Wrong. I was charged interest from the transaction date. They waived the interest charge after I explained that their rep gave inaccurate info. Great.

The next month, I was charged interest, but IIRC, the rep explained that it was trailing interest. He even told me that I could avoid that in the future by calling to get the exact amt that I had to pay. After our call, I paid what he told me would help me avoid the trailing interest issue. I actually paid above that to account for the interest for the few days between the statement and the date that I called.

The next month, I was hit with a "minimum interest fee". It's just a $1, but when I notice these things, especially when they're this small, it makes me wonder how many other customers are not noticing while the bank is profiting off of what I consider a glitch or scam.

So, I wanted them to explain this fee. They did refund it, but I still asked the guy to justify the fees. He went over all of the charges and my payments. I think that by the end, even he was confused and said, "That's just the way the system works. If you want to file a complaint..." 😡 That's just the way the system works???!! That is so not an acceptable answer, especially when you're dealing with money. That ticked me off.

Their site clearly states, "Generally, we will apply your Minimum Payment first to lower APR balances (such as Purchases) before balances with higher APRs (such as Cash Advances). Payments made in excess of the Minimum Payment will be applied to balances with higher APRs first before balances with lower ones."

There appears to be a discrepancy about how the payments are applied.When the rep transferred me to their escalations team today, the rep read me a statement (and she made sure to mention that I may not have heard it when it was read to me on previous calls...It was never read to me. 🙄). Her statement claims that they apply payments to balances with the lowest APR or higher dollar amount first. That's completely different than what's on their site and what the first rep told me last month. In fact, she went further to say that there's not even a way for me to avoid future interest on the purchase bc their system has no way to allocate payments to certain balances, and that I still have a purchase balance. Last month, my statment displayed a purchase balance of about $6. I paid almost $300 above my min payment. There's no way that I should still have a purchase balance, but I do. I'm waiting on a response from their escalations team.

What's really sad is that each of the last three reps that I tt all stated that the previous rep that I tt gave inaccurate or incomplete info. That's not good.

I hope they get resolved this for you, just keep in mind that BTs don't mix well with purchases, and you making a purchase is what started it.

When interest was manually adjusted for you, it doesn't change hard coding, so computer is computing based on the programming, not based on courtesy adjustments.

Also, it's really not a scam, they already performed adjustment they didn't have to, so I'm not sure why you're so upset with them.

This was a mistake on your part, so be patient and work with them, they really do not have to do anything and only you have something to gain. So, be patient and chalk it up to lessons learned

Re: WF "trailing interest"/minimum interest fee

cr101 — Thu, 29 Dec 2022 21:43:41 GMT

@Remedios wrote:
Also, it's really not a scam, they already performed adjustment they didn't have to, so I'm not sure why you're so upset with them.
This was a mistake on your part...

If my mistake was trusting what two of their reps told me, then it's my fault. 😏 It was the "That's just the way the system works" comment that ticked me off. LOL.

Re: WF "trailing interest"/minimum interest fee

OmarGB9 — Thu, 29 Dec 2022 21:50:39 GMT

@cr101 wrote:
@Remedios wrote:
Also, it's really not a scam, they already performed adjustment they didn't have to, so I'm not sure why you're so upset with them.
This was a mistake on your part...
If my mistake was trusting what two of their reps told me, then it's my fault. 😏 It was the "That's just the way the system works" comment that ticked me off. LOL.

I believe the mistake was making a purchase on a card with an active BT on it. Unless both purchases and BTs have a 0% promo going on simultaneously, what usually happens is that you'd be required to pay off all purchases AND BTs by the next due date to avoid any sort of interest.

Re: WF "trailing interest"/minimum interest fee

Remedios — Thu, 29 Dec 2022 22:32:07 GMT

@cr101 wrote:
@Remedios wrote:
Also, it's really not a scam, they already performed adjustment they didn't have to, so I'm not sure why you're so upset with them.
This was a mistake on your part...
If my mistake was trusting what two of their reps told me, then it's my fault. 😏 It was the "That's just the way the system works" comment that ticked me off. LOL.

That is how system works not because of scams but because of programming.

Again, adjusting interest is human intervention which is not baked into programming nor it should be.

Once quantum computing is in place (give it a few decades), endless possibilities and outcomes can be accounted for, this will be easy.

Until then, don't mix BTs and purchases unless both are in 0% promo.

No mixin', no problems, no scams.

If it's easier on you to be mad at reps, you can. It's an excercise in futility, but if it makes you happy 🎶

Re: WF "trailing interest"/minimum interest fee

AndySoCal — Fri, 30 Dec 2022 01:28:15 GMT

@cr101 If you can get a copy of what the escalations agent read to you and print out what is on the web site. Here is what I would do send the coppies of both documents to the CFPB showing the discrepancies between the two documents.

Re: WF "trailing interest"/minimum interest fee

NoMoreE46 — Fri, 30 Dec 2022 03:32:39 GMT

@Anonymous wrote:
I wouldn't usually expect a CSR to explain very much about policies. I agree the minimum interest fee doesn't appear to make sense (they know the amount, just charge it). No help to you, this is more than offset by all those making use of the small balance trick, where small amounts are forgiven every month by certain issuers.

Yeah, BBVA always zeroed out a recurring $1.00 monthly subscription fee. The fee always would be pending on the statement end date and they zeroed it off when the statement closed.

Re: WF "trailing interest"/minimum interest fee

NoMoreE46 — Fri, 30 Dec 2022 03:42:05 GMT

Whenever I plan to use 0% BT, I pay off any balance on that card to avoid any mixing of interest tiers.

This way I know that my balance will be at 0% excluding the BT fee. Then, I will pay the exact BT fee amount as soon as hits to keep a perfect audit trail of my 0% balance.

Re: WF "trailing interest"/minimum interest fee

RedKhaos — Fri, 30 Dec 2022 21:26:23 GMT

@cr101Hey, I think what you mentioned is very common, but most people don't want to dig into the weeds to figure it out. I'm still eating the consequence of not understanding trailing interest from a few years ago. I'm sure this is all by design to make the credit card system as

convoluted as possible.

I think you figured out most of what happened, but I was also puzzled by the $1 but think I got it. I believe the "$1 minimum interest fee" comes from the fact that interest was charged on any new purchases. So even though you followed what the 2nd CSR suggested and called in to pay for the purchases+interests associated with them asap, the fact that any interest did accrue during this period will still trigger this fee. I guess you can argue semantics whether this $1counts as trailing interest or just a fee associated with having to pay interest, which would be their argument.

Aside from the first CSR who was flat out wrong, I don't think the other two said or did anything wrong. We can all hate how the system works, but this is what we signed up for in order to take advantage of credit cards' benefits.

Re: WF "trailing interest"/minimum interest fee

NoMoreE46 — Fri, 30 Dec 2022 22:41:13 GMT

I know first handed that $0.50 is the minimum interest for Discover card.