Wells Fargo Cash Advance Interest Accrual

Rockysocks · ‎12-02-2022

Well, I didn't intend to do a cash advance, but here we are. Statement cut on 11/27. I performed a transaction on 11/29 (I made a payment directly to the escrow of my mortgage in branch, and they didn't bother telling me it would process as a cash advance. Granted, I didn't ask). I have a hefty balance that's 0% apr, but, of course, this cash advance amount is accruing interest. I nearly immediately called WF (when it posted) and asked to pay off the cash advance, so I can stop accruing interest. Although they did inform me that this cash advance won't affect my 0% apr on purchases, they said the only way I can pay off the cash advance amount specifically *today* is to pay off the entire balance on the card. They said my only option to pay off the cash advance *eventually* and separately would be to wait until the next statement cuts on 12/27 then pay the minimum payment plus the amount for the cash advance, and then at that point their system would immediately apply the extra to highest interest first, the cash advance. If I'm currently accruing interest on the amount, why can't their payment system currently recognize that it should be paid off first, now? Is this normal? Enlighten me please lol.

Anonymous · ‎12-03-2022

@Rockysocks wrote:
Well, I didn't intend to do a cash advance, but here we are. Statement cut on 11/27. I performed a transaction on 11/29 (I made a payment directly to the escrow of my mortgage in branch, and they didn't bother telling me it would process as a cash advance. Granted, I didn't ask). I have a hefty balance that's 0% apr, but, of course, this cash advance amount is accruing interest. I nearly immediately called WF (when it posted) and asked to pay off the cash advance, so I can stop accruing interest. Although they did inform me that this cash advance won't affect my 0% apr on purchases, they said the only way I can pay off the cash advance amount specifically *today* is to pay off the entire balance on the card. They said my only option to pay off the cash advance *eventually* and separately would be to wait until the next statement cuts on 12/27 then pay the minimum payment plus the amount for the cash advance, and then at that point their system would immediately apply the extra to highest interest first, the cash advance. If I'm currently accruing interest on the amount, why can't their payment system currently recognize that it should be paid off first, now? Is this normal? Enlighten me please lol.

The minimum payment can be applied any way the institution chooses (usually lowest or 0 APR!) and as they said, above that it goes to the highest interest. But like you, I don't understand why that couldn't happen now. I would try paying some amount over the minimum now and see what happens. If the excess goes to the cash advance, then do it with the whole amount. AFAIK, the law doesn't specify that the rules about highest APR are only after statement close!

Remedios · ‎12-03-2022

Sadly, I've done this myself. I was sending money via WU, I thought I was using debit card... twasn't, twas Freedom, still in 0% promo.

Granted, I wasn't carrying balance but when I called Chase, I was told exact same thing as you, while I didn't have a balance, CSR explained how it would have worked if I did (must have been a slow day at Chase).

I was able to pay it off as soon as it posted since I had no balance, CA fee posted after the statement. It was refunded for some weird reason 7 months later 🤷‍♀️

Once your statement closes, pay the cash amount advance, fee, and add whatever is your regular payment.

Unfortunately, CSR told you the truth as far as payment distribution if done mid-cycle. The only way you can avoid interest on cash advance amount is to pay off entire amount if you were to pay right now.

It doesn't hurt to try what @Anonymous if you have the money, because if it does nothing to pay off CA, you'll be on the hook for it after statement closes.

You're handling it better than me, my thread had a bit more frenzy attached to it

FinStar · ‎12-03-2022

@Rockysocks wrote:
Well, I didn't intend to do a cash advance, but here we are. Statement cut on 11/27. I performed a transaction on 11/29 (I made a payment directly to the escrow of my mortgage in branch, and they didn't bother telling me it would process as a cash advance. Granted, I didn't ask). I have a hefty balance that's 0% apr, but, of course, this cash advance amount is accruing interest. I nearly immediately called WF (when it posted) and asked to pay off the cash advance, so I can stop accruing interest. Although they did inform me that this cash advance won't affect my 0% apr on purchases, they said the only way I can pay off the cash advance amount specifically *today* is to pay off the entire balance on the card. They said my only option to pay off the cash advance *eventually* and separately would be to wait until the next statement cuts on 12/27 then pay the minimum payment plus the amount for the cash advance, and then at that point their system would immediately apply the extra to highest interest first, the cash advance. If I'm currently accruing interest on the amount, why can't their payment system currently recognize that it should be paid off first, now? Is this normal? Enlighten me please lol.

OP, these ooopsie things can happen sometimes, but they can be corrected to eventually reset the average daily cycle to rid of any lagging CA accrued interest. Often times it resolves itself in a couple of billing cycles.

One thing to note, though, teller or branch staff are not going to be well-versed to inform you (regardless if you had asked) whether such a transaction would code as a CA. That's typically covered in the CCA since the latter (escrow payment/funding) is not considered a standard purchase of goods.

Revelate · ‎12-03-2022

Pretty sure this is just a system issue and I'm surprised you got that detailed of an answer from a CSR.

With the corner case of a cash advance every other purchase on said WF credit card has a grace period so it would NEVER be righteous to pay that right now vs the current outstanding charges which are out of grace period. As LTL stated also if it isn't legally required, not likely to be done either.

I can't fault their system on this one, I wouldn't have designed for that specifically either, not out to get you, but the more things you try to design around the less robust your system and the CC servicing application is nearly as hardcore as it gets in any FI (the origination systems are the only thing more critical, well maybe the infrasuture that handles their transfers to the Fed and other things that cost massive money if they are down but that's a different category of infrastructure than their in house apps).