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).