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Can the bank apply payments to the “purchase portion” of the account first and then to the cash advance balance?

The bank must apply any amount paid that is more than the minimum payment to the balance with the highest interest rate. For example, if the highest interest rate on your account applies to the cash advance balance, the amount of any payment you make in excess of the minimum payment would be applied to the cash advance balance.

There is an exception for deferred interest plans. A deferred interest plan is a payment plan that is typically offered at the time of purchase that permits a consumer to avoid interest charges if the purchase balance is paid in full by a certain date. Often, deferred interest plans are offered in connection with the sale of higher-priced goods, such as furniture or electronics.

For deferred interest plans:

  • You may request to apply extra amounts to the deferred interest balance before other balances.
  • For the two billing cycles prior to the end of the deferred interest period, the credit card company must apply your entire payment in excess of the minimum payment amount to the deferred interest rate balance first.

Last Reviewed: October 2020

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.

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