Chase applying payments to lower interest rate balance first?!

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
2 posts
ppoxton
 
Posts: 2
Joined: Wed Dec 07, 2011 5:33 pm
Location: Oklahoma City OK

Chase applying payments to lower interest rate balance first?!

Postby ppoxton » Wed Dec 07, 2011 5:40 pm

After making extra payments for two months on my Chase Credit card I asked them why the higher APR interest rate balance on the card had not reduced, only the lower rate. This is what they have told me;

Thank you for contacting us with your concerns about the payment calculation on your account.

Please be informed, when a payment is received, it is generally applied to the account's previous billing cycle balance before getting applied to the account's current billing cycle transactions.

In most instances, payments are applied to balances with lower Annual Percentage Rates (APRs) before balances with higher APRs. Unpaid interest charges and fees associated with each balance type are generally paid first. We then allocate any remaining payment amount to the principal balances beginning with lower-APR balances and ending with higher-APR balances. Payments are generally applied last to standard cash advance balances and special qualifying interest-free promotional balances.

At this time, we're unable to apply payments to a specific balance on request. If a payment is greater than the balance, the excess will be recognized as a credit balance. It will then be applied as a payment toward future transactions or refunded to you.

I hope this clarifies your concern. If you have any further questions, please reply using the Secure Message Center.
Didn't the law pass in February of this year to apply extra payments to the higher interest balances??????


Kael
 
Posts: 1
Joined: Thu Jun 07, 2012 3:00 pm
Location: Las Vegas, NV

Postby Kael » Thu Jun 07, 2012 3:06 pm

ppoxton wrote:After making extra payments for two months on my Chase Credit card I asked them why the higher APR interest rate balance on the card had not reduced, only the lower rate. This is what they have told me;

Didn't the law pass in February of this year to apply extra payments to the higher interest balances??????


I know this is an old post, but it showed up in a google search and I figured it deserved an answer because of that.

To my knowledge. Yes, they must apply anything above the minimum payment to the highest interest rate first. If they are not doing this, you should talk to a manager and remind them of the new credit card law.

Highest interest balances paid first: When consumers have accounts that carry different interest rates for different types of purchases (i.e., cash advances, regular purchases, balance transfers or ATM withdrawals), payments in excess of the minimum amount due must go to balances with higher interest rates first. Common practice in the industry had been to apply all amounts over the minimum monthly payments to the lowest-interest balances first -- thus extending the time it takes to pay off higher-interest rate balances. http://www.creditcards.com/credit-card-news/help/what-the-new-credit-card-rules-mean-6000.php


These laws were enacted for a reason.

Are these balances predating the law change? If they are, they may have found a loophole which allows the balances before the law change to have the lowest paid first (or in the order that they decide, like the "old" way).



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