Avoiding Interest Charges

[Judith123]

Hello. According to the "Important Information about PayPal Credit" enclosed with my monthly statements, the amount to avoid standard and deferred interest on my next statement includes (amongst others) and Deferred Interest Purchases expiring next billing cycle. These are the only two types of purchases I've made to date.

Why is my Amount to Avoid Interest on my statements so much higher than just the sum of my Standard Purchases and Deferred Interest Purchases that are about to Expire?  For example: On my current statement (closing date 08/02/16), the one Standard Purchase and two Deferred Interest Purchases that expire 08/27/16 total $188.38. Why to I have to pay $444.36 (according to my statement) to avoid interest on my next statement? 

[sharpiemarker]

Yeah, all credit cards do that.  They apply payment first to the low interest/promotional balances first.  Been like that for a long time.  

Here's how PayPal Credit applies payments:

10. PAYMENT APPLICATION AND PREPAYMENT:

We will use each payment in the amount of the Minimum Payment Due or less, first to pay billed Monthly Plan Payments on any Easy Payments Purchases, then billed interest, then billed fees, then the principal balance, and then any other amounts due. However, if you have a balance on a Deferred Interest Purchase, during the two Billing Cycles immediately preceding its Expiration Date, we may use the payment, after the amount to pay billed Monthly Plan Payments on any Easy Payments Purchases to pay the balance on such Deferred Interest Purchase.

You may at any time pay, in whole or in part, the total unpaid balance without any additional charge for prepayment. If you pay more than the Minimum Payment Due in any Billing Cycle, you still must make the Minimum Payment Due the next Billing Cycle. We will use any amount in excess of the Minimum Payment Due to pay the balances with the highest interest rate, then the next highest interest rate, and so forth. However, during the two Billing Cycles immediately preceding the Expiration Date of any Deferred Interest Purchase, we may use payments first to pay the balance on such Deferred Interest Purchase(s). We may choose to apply prepayments to the Deferred Interest Purchase balances before other balances.

[Judith123]

Sharpiemarker --

PayPal can't keep Not crediting my Standard Purchases!  They can't keep making me pay for those same Standard Purchases over and over.  That's what they are doing!   

Here's what their Billing Statement says:

I pay that amount, each month.  They can't just NOT give me credit for paying it!!! 

It's been my understanding, Standard Purchases are paid first, before Deferred Interest Purchases.  The Standard Purchases (however derived) are the principle balance.

Maybe I should get the CFPB involved.  I'm going over the edge here.  Maybe I just need a nap.  LOL.  🙂 

Thanks for replying.  🙂

[sharpiemarker]

Have you brought this to the attention of PayPal Credit?  Contact info here: https://www.paypalcredit.com/index.html

I think I get what you mean, they are not applying the amount you pay to reduce your standard purchases or zeroing it out when you pay it all every month in the next bill.  You keep paying it in full but it don't go away.  So something is not right or their explanation of how their application of payment is confusing.

[Judith123]

YES, EXACTLY!!!  Thank you for understanding!  🙂

I sent them an email Friday.  PalPal responded with an auto-reply.  It said if the Q&As, contained therein, didn't answer my concerns, to reply to the email.  I did that yesterday.  So, now I'm waiting to hear from them.  

I'm sorry I didn;t reply to your post sooner.  I'm new to this board and I'm still getting used to how it works,  (That is to say, I didn;t see your post right away.  My email alerts, because they don't come from the regular PayPal address, were going to Junk Mail... Just learned that yesterday, too. lol.)

Anyway, thanks for repsonding.  I'll post the result.... if it's not too embarrassing...lol.

Have a great day!! 

[Judith123]

... Well, THAT didn't go well!  I had to call, in response to their reply-email.  After a half hour or 45 minutes of explaining, back and forth, it turned in to a shouting match. 

I couldn't get the PayPal rep to understand what you said ("...they are not applying the amount you pay to reduce your standard purchases or zeroing it out when you pay it all every month in the next bill.  You keep paying it in full but it don't go away., ."  He kept dragging in that any thing I pay, in addition to the minimum, is applied a certain way.  I had no argument with that -- I know how they apply it.  He couldn't grasp that they weren't clearing or zeroing out my New standard purchases after I paid them in full.  In fact, he said that because of the way the monies are applied, they will NEVER do that (apply it to the Standard Purchases; they will always apply it to the promotional items first...)  I couldn't get him to understand the problem isn't with the extra being applied to promotional purchases, it was that they are not clearing the New Standard Purchases off my Current (SP) Balance after I pay them.  (And he kept saying they will never do that!)  

In the end, I told him I would pay the current "Amount to Avoid Interest" and, then, call and allocate the enough to cover the "Current Balance" of the Standard Purchases -- to zero it out.  Because that is the only way I'll be able to do it.  I will never be able to make another Standard Purchase because they "NEVER" apply my payments to them!

WOW, I can see why people hate PayPal! 

I guess it's CFPB time!  (Though I fear I won't be able to get them to understand either.  😞

Thanks you your time.

[DPCreations]

Unless you have specific statement and transaction details for the explanation I can easily see how an agent woldn't understand.  I understand quite well the explanation on the statement, but I would need to see specific statement and payments to show how that worked or didnt work.  I think you would need to find the statement where the issue started and use that for an explanation.  Otherwise, all the aget could explain is what is the stated payment hierarchy.

[Judith123]

Hi, DLCreations ---

I agree, the monies first go to current Standard Purchases, and monies left go to deferred interest purchases, and so on.

I know it's hard to follow what I'm saying...  I don't know how I can say it any clearer ---

I pay the Amount to Avoid Interest every month, but they don't apply the money to my Standard Purchases. 

They don't charge me interest on them, but they treat the un-credited Standard Purchases as a new Standard Purchase -- and make me pay it again to Avoid Interest.  (Every month, they add the un-credited Standard Purchases to the past months' un-credited Standard Purchases and tell me I have to pay that sum to avoid interest on my next statement.... that's in addition to any NEW Standard Purchases and Deferred Interest Purchases due/expiring.)

Said another way --- In addition to paying the current Standard Purchases and the Deferred Interest Purchases due, I pay (again) every Standard Purchase I've already paid this year. 

I give up.  😕   I can't explain it better... yet, anyway. 

THANK YOU for all your time, replies, and trying to understand. 🙂       

[DPCreations]

Without following each statement from your FIRST standard pruchase, there is no way anyone here can explain your situation.  You need to read and undestand the entire statement from your first standard purchase.

[Judith123]

I've been doing that -- going back through all my statements. 

[Judith123]

Today, I read a complaint, filed with the BBB (Better Business Bureau) by someone who was very upset that none of his $100 payment went towards his promotional (No Payments - No Interest for 6 months if Paid in full) purchases.  His minimum payment due was $25.  In PayPal's response, he was told if he wanted any money, paid in excess of his minimum amount due, to go towards promotional purchases, he would have to call PayPal and tell them how he wanted the money allocated.  

I have the opposite problem.  PayPal is not applying any of my excess payments to Standard Purchases.  (They are applying it all to promotional purchases.) 

Yesterday, I read a complaint, filed with the CFPB (Consumer Financial Protection Bureau), earlier this year, by someone who, like me, wanted to anticipate (on future statements) the amounts he would have to pay to Avoid Interest, so he could budget his monthly income.  He was irrate that he could not, because PayPal was adding (what he called) a "secret" number to his (predictable) Standard and promotional purchases due each month.  "Secret" -- ha! -- that's exactly what I called it, several months ago, when I gave up trying to anticipate my "Amounts to Avoid Interest".

I wonder if he figured it out.  I'd bet it was the sum of past Standard Purchases that that he was not credited for when he paid his "Amount to Avoid Interest" every month.  He ended his complaint by saying he was closing his account (or did) and would never again use PayPal.

I'm just sharing some of my findings.  I'm going to get back to combing through old statements.  🙂