Common use of HOW WE APPLY PAYMENTS Clause in Contracts

HOW WE APPLY PAYMENTS. When you make a payment to your Card Account, we will apply it in a specific order, as explained in this section. For payments you make towards paying down the New Balance, first we will take the entire balance and group the Charges together into different categories (based on the interest rate that applies to them) - all items with the same interest rate (such as Purchases) will be put together in the same group. Then, starting with the category that has the highest interest rate and then to the other categories of Charges in descending order based on their interest rate (meaning that payments are applied to Charges with the highest rate first and Charges with the lowest rate last), we will distribute the payments to the different types of Charges on your Card Account in the following order: (a) first to interest charges; (b) then to creditor insurance; (c) then to any fees that are payable (like annual fees, over limit fees or Cash Advance fees); (d) then to Balance Transfers; (e) then to other Cash Advances (including Cheques); (f) then to Purchases; and (g) then to disputed items. For each category of Charges with the same interest rate, if there is more than one transaction or Charge for any of the items above, then we will split the payment proportionally between the items. If you have paid more than your New Balance, we will apply the extra payment to Charges that have not yet appeared on your Statement, but which have been posted to your Card Account, in the following order (unless we tell you that we will apply the extra payment in a different way): (a) first to Purchases; (b) then to Balance Transfers; (c) then to other Cash Advances (including Cheques); (d) then to disputed items; and (e) then to Cash Advance Fees and any other Fees. If you have a credit on your Card Account, we’ll apply the credit towards future Charges posted to the Card Account in the order that they are posted, until the credit is used up.