Is this normal for credit card interest?

[Jen and Ashwin]

Seems to be a violation.

#6: http://www.creditcards.com/credit-card-news/help/card-act-12-consumer-protections-6000.php

No, this is exactly in line with what the post you just linked reads. It says,

"6. Highest interest balances paid first: payments in excess of the minimum amount due must go to balances with higher interest rates first. A 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."

 

[Marionnette]

Tossing a fit to a customer service rep who has zero affect on the card's interest accrual because the cardholder thinks the card's are silly might not be the ideal reaction.

"Tossing a fit" with a CSR is never a good idea but it never hurts to politely ask if they can extend a courtesy and refund an interest charge. They often have a little bit of latitude when it comes to those things but you have to specifically ask for it. They will not volunteer to do it.

 

[GreatLakes]

Nope. I read my statement and it says that the minimum payment amount is applied to the lowest APR balance and any excess is applied to the highest APR. My credit card terms on my statement from this month read,

"Payments are allocated to posted balances. If your account has balances with different APRs, we will allocate the amount of your payment equal to the Total Minimum Payment Due to the lowest APR balances first (including transactions made after this statement). Payment amounts in excess of your Total Minimum Payment Due will be applied to balances with higher APRs before balances with lower APRs."

Seems to be a violation.

#6: http://www.creditcards.com/credit-card-news/help/card-act-12-consumer-protections-6000.php

That regulation only applies to payments beyond the minimum balance due which is in line with the terms quoted by Ashwin.

 

[supersnoop]

That regulation only applies to payments beyond the minimum balance due which is in line with the terms quoted by Ashwin.

Yes, I see that now. I think we got off arguing on different tangents. The original question still stands; does carrying a promotional balance negate the interest-free grace period for purchases? And following that, does paying the minimum payment plus enough to cover new charges reinstate the interest-free grace period?

 

[GreatLakes]

Yes, I see that now. I think we got off arguing on different tangents. The original question still stands; does carrying a promotional balance negate the interest-free grace period for purchases? And following that, does paying the minimum payment plus enough to cover new charges reinstate the interest-free grace period?

I'm really not sure. Any card that I do carry a promotional 0% balance on doesn't get used at all for anything else. I suspect it depends on the T & C's of each individual card.

 

[mistysue]

Yes, I see that now. I think we got off arguing on different tangents. The original question still stands; does carrying a promotional balance negate the interest-free grace period for purchases? And following that, does paying the minimum payment plus enough to cover new charges reinstate the interest-free grace period?

The answer is yes, a promotional balance negates the interest-free grace period.
No, paying only the min. + new charges will not reinstate a grace period. 1) No grace period until promo balance is paid off 2)you have to pay min. + new charges +new interest since that last statement.

You have to pay any interest up to the date they receive the payment in order to stop interest accruing. I learned this in March when I paid the minimum payment, all charges as of the statement and most of the charges since the statement. (overpaid the statement balance outside of promo by $300) At that moment I would have had about $5 remaining balance above the 0% balance. Expecting an April statement showing my 0% balance plus ~$5 in new charges, my next statement showed a previous balance of $5 + the interest + added more interest so I had a bill for around $40. I complained and learned that if you have a promo balance there is no such thing as a grace period.

 

[pearlieq]

I would absolutely encourage you to call and explain the situation and ask them to waive the interest charge. Most banks will waive a fee as a one-time courtesy for a good customer who makes an obvious mistake like that. There's nothing wrong with a polite request.

 

[JWigs]

Tossing a fit to a customer service rep who has zero effect on the card's terms of interest accrual because the cardholder thinks the card's are silly might not be the ideal reaction.

edited to correct one minor and one nonsensical error

Well we spend an excessive amount with cap one and it was resolved pretty quickly without having to escalate. We never carry a balance and it was easy to see it was a billing issue with how their system works and so easily reversible.

 

[Kaytie]

No matter how much anyone charges on any credit card, tossing a fit with customer service - whether a simple billing issue or billing in accordance with the bank's/card's terms and conditions for interest calculation - is just simply never, ever the appropriate course of action.