Orchard Bank

[Anonymous]

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BhamGurlyGurl wrote:

On December 31, 2007 I paid the balance due in full as shown on the statement of January 2008 in the amount of $870.88. According to the “periodic finance charge summary” this balance included the following:

1.      Purchases at the nominal rate of 27.24%; balance due $365.66 and

2.      Cash advances at the nominal rate of 28.49%; balance due $519.94.

For a reason that is not clear on this statement my payment of $870.88 posted on December 31st was applied in full to the purchases balance ($365.66) but only a portion of the remaining payment was applied to the cash advances balance ($197.72), thereby leaving a balance of $322.22 to accrue the higher finance rate creating the amount due of $7.80. Where was the remaining $307.50 of the $870.88 payment sitting during this time? Why was my payment of $870.88 not applied to both balances at the time of posting?

Ok. Here is the pertinent portion of my first dispute letter for any sleuths out there

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I'm confused.... don't those two amounts total 885.60?

[unknown_entity]

They are entitled to interest on the cash advance for the entire billing cycle. 

[unknown_entity]

If you PIF a CC that has a cash advance on it and don't charge anything else that whole billing cycle,  You will still get a bill the next billing cycle for interest on the cash advance.

[Anonymous]

Ok, with that in mind can you ever PIF? If you can't rely on the statement for the "true" account balance to pay how do you ever reach a $0 balance?

This may be a good deterent for me to never get a cash advance for any reason.

[unknown_entity]

Yea, but you have to PIF 2 months in a row and you can't take cash advances.

[Anonymous]

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BhamGurlyGurl wrote:

Ok, with that in mind can you ever PIF? If you can't rely on the statement for the "true" account balance to pay how do you ever reach a $0 balance?

This may be a good deterent for me to never get a cash advance for any reason.

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Yes, you can PIF, but you'll have to do it two months in a row.

unknown_entity is correct: There is no grace period on a cash advance.  That means that interest started accruing as soon as you took the advance, and even if they did apply part of your payment later than it should have been applied, that did not cause the finance charges.

When you take a cash advance, and then PIF your purchases balance, you will have accrued finance charges that will appear on the following statement.  This is the way it works with all CCCs, not just HSBC.

Having said that, I still think they were in error by not applying your entire payment in a timely manner.  Keep in mind, though, that it appears that even if they had applied your payment in a timely manner, you would have only saved a few days worth of finance charges (may be a couple of bucks), but still would have been charged on the cash advance balance.

[Anonymous]

So sorry I haven't replied sooner...I've been having a terrible time logging in.

Anyway, all of you have taught me a lot. While I hate having to pay that way, it is good to know first hand how that will impact your finances.

This is worse than the payday loan people. At least when you walk in the door you can pay them off and none of this extra days finance charge business!! At least not yet

Many thanks again for all the education and knowledge!!!!

[unknown_entity]

As with most things, the devil is in the details.  smileywink:

[Anonymous]

Soooo true Unknown Entity...so true. This actually begs a question I'll post in a separate thread...