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I have a 0% balance on a card through May 09' for about $2000 now. I recently used the card for $60 and sent in a payment of $450. They charged me a finance charge of .99. When I called, they said my payments go to the 0% balance first and there was no way to direct them otherwise. It is a Citibank card. This may be in the fine print but have you ever heard of this and is there anything I can do about it besides not using the card until I pay off the 0% balance?
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Nothing you can do, except complain. That is how they get you. I had a citi card, with three different interest rates.
Purchases - 9.9%
Promotional Balance transfer - 4.9%
Promotional Balance transfer - 3.9%
Most of the payments would go to lower balances first. There were actually months where I would pay double min. payment due, and the PRINCIPAL balance of the 9.9% would go UP month-over-month!
My recommendation is using different cards for balance transfers / purchases-for-rewards.
I did hear on Suzi Orman a while back, that there may be legislation brewing regarding not allowing credit card companies to choose where your payments go, and instead making it to where the payments would go:
1) First to pay off all outstanding interest.
2) Pay equal amounts of principal on all loans with remaining payment.
Sorry about that. I know its frustrating. -
Send a note to your congress critters about what happened. If nothing else, your case can be used to influence the pending legislation!
JDComment
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Sorry, but there is nothing you can do. Every single card has the exact same rules. They always apply your payment to the balance with the lower APR. I've been getting pre-approved applications from Washington Mutual every few days, saying that I could get 0% APR on purchases for 18 months if I transfer a balance now. It's pretty smart on their part. I bet a lot of people transferred a balance to them at 8.99% only to find out later that they can't pay it off until they pay off the purchase balance in full, which kinda defeats the whole purpose of getting a 0% rate on purchases. I guess one could transfer the minimum required $100 and then pay it off right away, but not many think of that.Comment
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OK, thanks for the replies. I will be smarter next time. We use discover 99% of the time so I will just not use that card until I pay off the balance.Comment
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Good Luck! Be smarter next time and think off what is the best way...Comment
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You agreed to those terms...Comment
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I am a man. Do you think I read the directions? LOLComment
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A similar thing happened to me with our Chase card. My DH had forgotten that he used the card to set up his iTunes account and by the time we realized it and changed it, a small charge had gone onto the card that we were paying down a balance transfer with 0% interest.
What I did was first make the regular payment online and then sent in a separate payment for the full amount of the charge with a note attached saying to apply the payment to the balance due for that purchase. It actually worked and that small balanced was payed off. (I read about doing this on the internet somewhere, but I can't remember the site.)
It might be worth a try if you want to avoid the finance charges.Comment
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thanks for the tip. I will try it. It make sense to me.Comment
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