BOA Doubled Minimum Payment in 2 Months

[Credit_hawk]

Hey guys! I've been around for awhile and I've not seen anything like this and wanted to run it past smarter individuals like yourselves. So, my credit has been A1 if I may be so forward in admitting. I've got an 800 FICO 8 across all 3 bureaus. 

I got a decent promotional offer on my BofA card. I think it's 2% for 9 months. So the past 4 months I've put about $3,500 on it. Roughly $1k a month give or take. During this time I haven't bothered making any extra payments outside of autopay minimums. I have the money to pay it all off now but the couple bucks in interest is no worry to me. 

My minimum payment had always been $25 a month for the past 5 years no matter how much I charged but I'd always pay it off immediately. It remained at $25 until I hit a balance of about $2000 two or 3 months ago. Then it jumped to $30. I found that odd but didn't bother with it. I just noticed this month from my bank statement I paid $42 for my minimum  and my statement period closed 3 days ago and I just checked it and they raised it to a minimum of $51 now. But my balance has only increased $600 since last month and only $2,000 since it was $25. I'm about to just pay it off. I find this off putting and they've included no note on my bill as to why or the formula they're using. One thing is for sure, it's not a standard formula as the minimum payment is growing faster than the balance in relation to each other. I believe my balance is $3,500 with a minimum payment of $51 now.

What's going on with this? Should I call or just pay it off and lose months of the promo? 

[NRB525]

Just spitballing here:

Minimum payment is likely 1.5% of your actual balance, with a minimum of $25 for low balances. 

It should be in the fine print, if not on the statement then in the contract document for the card.

Congrats on the 800 score.

[longtimelurker]

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@NRB525 wrote:

Just spitballing here:

Minimum payment is likely 1.5% of your actual balance, with a minimum of $25 for low balances. 

It should be in the fine print, if not on the statement then in the contract document for the card.

Congrats on the 800 score.

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I agree, it's more that the $25 was the anomaly (not proportional to balance)

[CreditMarathoner]

The minimum payment is normally calculated as a  percentage of the statement balance, like 1.5% or 2% depending on the card/issuer, with a minimum of $25, unless your balance is lower.  Also certain fees and any amount over your limit would be added on.  It should be described in your credit card agreement you received when you got the card.

EDIT:  After re-reading your post, I saw that you were charging and paying off right away and were seeing $25 minimum payments, and it only went up when you started carrying a balance.  That's because the minimum is based on your statement balance, not your actual balance.  When you started carrying a balance under your low APR promo, your statement balance was higher so your minimum payment went up.  As you pay it down, it will drop back down to the baseline of $25.

Oddly, I can't find a copy of the agreement online for my BofA card... but you can request a paper copy.  You'd think they'd make it available as a PDF.

[FireMedic1]

You may have a variable rate card. Prime rates went up. Interest up. Payments up. Check your new APR compared to when you opended the account.

[longtimelurker]

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@FireMedic1 wrote:

You may have a variable rate card. Prime rates went up. Interest up. Payments up. Check your new APR compared to when you opended the account.

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It's almost certain that OP has a variable rate card (as it's BOA).   However, AFAIK, issuers do not tie minimum payments  to any APR, only to the balance (and other fees).   Now the balance may indeed go up as APRs increase, but OP has accounted for that.

[Credit_hawk]

Thanks for all your responses guys! I read through them all and it appears by my calculations maybe BOA's minimum payment is about 1.43% of the total balance or $25, whichever is larger. I didn't read that anywhere I could find from my account info but taking some of your advice I crunched numbers and that figure seems to be around the rate BofA is consistently tying my minimum payment to.

As far as the APR increasing, yes, my card is variable and it has increased about 2% it seems but since I'm locked into a low promotion rate for 9 months my interest rate is fixed for now. 

It seems some were surprised my minimum payment was as low as $25 to begin with. It's always been $25 minimum since I got the card years ago. Most of my other cards have a minimum payment of $35 and I think my Amex or Discover might even be nearly $40 minimum by now. Bank of America has always been good to me and they are my favorite lender even though others offer better services for different things. 

[Kforce]

A lot of different ways issuers calculate minimum.

No idea about BofA

Just a few of the more common

Most have two or three methods and a logic test for which is used.

If balance < 25  (Might be 35, 50, etc)

        Pay balance in full

else

 Largest Value from following:

         A percent of balance + interest + fees  

        (1% balance + interest+fees)

        (3500*0.01)+(((3500*0.02)/360)*30) +fees

        If interest rate is high or a late payment fee hit

or

        A flat percentage of balance

       (2%, 2.5%, Etc) Examples only

       (3500*0.024)

or

      Fixed minimum (25,30,40)

End

Example only some use more, some use less, and some have even more complex math

Bottom line as balance goes up so does minimum and as you pay it also lowers.