topic Re: Chase not applying extra payment to highest rate balances? in Credit Cards

Chase not applying extra payment to highest rate balances?

Anonymous — Mon, 29 Mar 2010 20:55:47 GMT

I just received my credit card statement from Chase. I had an existing balance transfer at a low rate combined with some recent purchases at A higher APR. I noticed that my extra payments were not being applied to the highest rate balances.

Isn't this practice outlawed as of Feb 2010? Has anyone else ecperienced this?

Re: Chase not applying extra payment to highest rate balances?

bakalao2k — Mon, 29 Mar 2010 20:57:41 GMT

Call customer service and find out why the extra payments weren't applied to the balance with the highest APR.

Re: Chase not applying extra payment to highest rate balances?

Anonymous — Tue, 30 Mar 2010 05:35:06 GMT

So Chase is ignoring the CARD Act all over the place?

Re: Chase not applying extra payment to highest rate balances?

Lel — Tue, 30 Mar 2010 05:55:46 GMT

@Anonymous wrote:

I just received my credit card statement from Chase. I had an existing balance transfer at a low rate combined with some recent purchases at A higher APR. I noticed that my extra payments were not being applied to the highest rate balances.

Isn't this practice outlawed as of Feb 2010? Has anyone else ecperienced this?

Was the interest deferred for a period of time on the BT balance, and did the deferred interest period recently expire? According to my read of the Credit CARD Act, payments in excess of the minimum payment are supposed to be applied to the part of the balance on which the interest was deferred, without regard to the interest rate.

I could be reading it wrong - I find legalese to be very cumbersome to understand. So here's the text; someone let me know if I'm interpreting the law incorrectly.

Sec. 164(b) Application of Payments-

(1) IN GENERAL- Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS- A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

Re: Chase not applying extra payment to highest rate balances?

Anonymous — Tue, 30 Mar 2010 06:08:32 GMT

@Lel wrote:

@Anonymous wrote:
I just received my credit card statement from Chase. I had an existing balance transfer at a low rate combined with some recent purchases at A higher APR. I noticed that my extra payments were not being applied to the highest rate balances.

Isn't this practice outlawed as of Feb 2010? Has anyone else ecperienced this?

Was the interest deferred for a period of time on the BT balance, and did the deferred interest period recently expire? According to my read of the Credit CARD Act, payments in excess of the minimum payment are supposed to be applied to the part of the balance on which the interest was deferred, without regard to the interest rate.

I could be reading it wrong - I find legalese to be very cumbersome to understand. So here's the text; someone let me know if I'm interpreting the law incorrectly.

Sec. 164(b) Application of Payments-

(1) IN GENERAL- Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS- A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

Hi, Lel. Do you have a link to the entire CARD Act?

Re: Chase not applying extra payment to highest rate balances?

Lel — Tue, 30 Mar 2010 06:14:06 GMT

Try this link:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-627

Re: Chase not applying extra payment to highest rate balances?

Anonymous — Tue, 30 Mar 2010 11:06:58 GMT

@Lel wrote:
Try this link:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-627

Thank you. Now I have it bookmarked.

Re: Chase not applying extra payment to highest rate balances?

Anonymous — Tue, 30 Mar 2010 18:00:37 GMT

To answer the question about deferred interest rate:

No, none the the balance is deferred interest of any kind, just a simple promotional rate I had used for a balance transfer about a year ago.

Re: Chase not applying extra payment to highest rate balances?

Anonymous — Wed, 31 Mar 2010 15:24:50 GMT

Dgtown;

This is my understanding how payments are applied.

Example only: Minimum payment is $100.00 dollars. Interest for this period is $10.00.

Creditor will subtract $10.00 (Interest) from minimum payment of $100.00 leaving $90.00 to be applied to the lowest APR.

If you make any payments in excess of the $100.00, the excess must now be applied to the highest APR.

As bakalao2k suggested, call customer service for an explanation.