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Is Bank of America Treating Me Right? Is It Legal? – Judy


“Dear Steve,

Can you tell me if you know or who does the following questions about Bank of America credit card:

1. Is it legal for a credit analyst to transfer a $400 3.99% balance to a 19.99% balance?

2. Is it legal for the Bank to not apply from a payment…the finance charges to all balances? In other words I am finding since the credit dept screamed at me cause they couldn’t scare me…the above has happened on my card, which I closed to see what they are doing and now my 19.99% cash advance is going up each month as if no finance charge was being applied. I know they can apply what is left over in a payment to any balance but I thought the bank was required to credit that part of my finance charge from the 19.99% balance to that balance. It appears to be going up $70.00 a month with no crediting and that $70.00 is the finance charge for one month. It is as if I am not making any payments on the largest percent. Is it legal?

Thanks for any help.


Dear Judy,

Is it legal, probably. According to most terms and conditions on credit cards the bank will apply payments first to the lowest interest rate balances and then when those are completely paid off they will apply payments to the next highest interest rate balance.

Below is an excerpt from a Citibank card I reviewed and covered this operating procedure.

In the next paragraph Citi goes out of their way to point out that the 0% offer does not extend to cash advances and that payments are applied to lower APRs on your account before higher interest charged. (From the online terms and conditions “We apply your payments to low APR balances first. You cannot pay off higher APR balances until you pay off lower APR balances. That means your savings from any promotional APR offer will be reduced if you make purchases or cash advances that have higher APRs.”) The purpose of this is to maximize the interest charged to you. So if you do get this card and take a cash advance on it, all the money you send will be applied to the 0% part of your bill while the really high cash advance part will be building up interest. – Credit Card Review – Citi Platinum Select MasterCard Mailing

The best thing to do would be to get a copy of the terms and conditions for your specific card with Bank of America and read them to find out what they can do to you, with the permission you’ve already given them. You will be shocked.

READ  Credit Card Review - Citi Platinum Select MasterCard Mailing

And while banks do things to maximize their profit and prevent you from getting out of debt quickly, I’ve rarely seen them do things that were not clearly spelled out in the terms and conditions.

Best way to avoid these problems is to not carry a balance and pay whatever you charge off in full each month.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Some of what I explained in my missing comment was that I got the card online and the Terms are not set up to print. I tried going on the site and reading their card terms and nothing says they can transfer a purchase balance to a cash advance balance and nothing says how they breakdown the monthly payment when they receive it. It is constructed of a finance charge plus a percent of the balance but they will not answer if they credit the finance charge to where it came from (which would bring down somewhat each balance instead of adding the FC to the balance even though it is paid) and then they can apply the money after the FC to any balance. That I could understand but I do not see anywhere in any Terms that they can bill you for a FC but then do not have to credit it.

    I tried emailing the simply question of a breakdown of what they do with a credit card payment. I was asking as a member of the public. Well, my first response has been they see I am a customer so I should talk to the Credit dept about my question…when it is a person in the credit dept that I believe is playing around with my account as a personal punishment because I didn’t agree with what she was screaming at me about on the phone for no reason…never had customer service like that but ever since..something is not right with my statements. Who do I ask to investigate whether my card statements are being credited properly?
    The Credit Dept? The problem is internal and personal for some reason. I’m sorry none of this is making sense somehow cause I never asked about applying to the lowest rate..I already know that. I want to know where my finance charge payment is being credited to since it doesn’t appear it is to the finance charges I was charged each month.

    You must know that probably all bank Terms and Conditions are almost identical and I don’t believe I ever read about the payment not being credited correctly. I even downloaded on the Net how a credit card interest is paid and it showed one payment being made, for interest and principal. The interest was subtracted from the payment as paid and the original principal went down after the balance of the payment was subtracted. That is all I am asking the bank to do and I don’t know how to get their attention. After all, her deliberate mistakes is only costing me money and the bank gets more by her moving all my balances to the one cash advance high rate. All I know is my cash advance has gained almost $300 in the past 2 months, with no cash charges being made but then no finance charge is being credited to that balance.

    Thanks again for trying.
    Hope someone can find an answer to this one.

  • I left a comment explaining this was not about applying to the lowest APR which I know is about applying the finance charge part of the payment to the charge that incurred it. I explained more in detail but I give up. Your site erased my response while asking me again for an email address.
    Thanks anyway. I will just keep asking until someone gives me an answer.

    You will probably get this comment without it being erased.
    Too bad you couldn’t get the one before this that I really put a lot of effort into.

    • Judy,

      Sorry you had problems leaving a comment. I stand by my statement that you need to get a copy of the terms and conditions for your card and read all of them to see how this situation is addressed in the terms.


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