Payment question

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imwondering
 
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Joined: Sun Jan 17, 2010 3:25 pm
Location: usa

Payment question

Postby imwondering » Sun Jan 17, 2010 3:57 pm

I searched, without any success, for an answer to the following question before coming to this forum. I have a Discover card with a 12 month intro rate on balance transfers of 0%, and a period of 6 months on purchases with the same rate. I initially transferred a large balance over, but made a few purchases before xmas. My question is this:

If I make a payments in the exact amount of the latter purchases how does Discover apply the payment? Is payment applied to the oldest amount (assuming balance transfers and purchases are treated the same), or is the payment applied to the most recent transaction? I ask, as some of you might imagine, because I'm concerned whether in ~5 months time whether interest will begin to be assessed on the part of the balance which consisted of the purchases.

Thanks.


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Cucumber
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Postby Cucumber » Fri Jan 22, 2010 3:22 am

It USED to be that your payment was applied to the lower rate FIRST (with all CC's not just Discover) but as of Feb 22nd the new reform kicks in. That means your payments will go towards the higher rate first :D

Like on month 7 when the 0% on purchases runs out, your payments will start going for that since its interest will be higher than your 0% BT offer. Does that make sense?
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imwondering
 
Posts: 2
Joined: Sun Jan 17, 2010 3:25 pm
Location: usa

Postby imwondering » Mon Jan 25, 2010 10:27 am

It does, thank you. So I should rather wait to pay more than the minimum until the first period after the 2/22 because any more paid now only reduces the the balance transfer balance (I'm assuming that if both are currently 0%, than the tie-breaker is age of balance). Thank you so much for your help, and for informing me about the 2/22 reform. I admit that while I heard discussion of it on public radio and saw a snippet here and there in the papers, I knew next to nothing about what it would actually change.



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