US Airways Dividend Miles - USAir Barclays Mastercard - beware

I applied for the Barclays USAir Mastercard because of the 15,000 mile bonus and added bonus of 10,000 additional miles if you did a balance transfer of $10,000+ at 0% interest. Unfortunately, I also charged $4000 on the card the first month.

Barclays charged a 1% fee for the $10,000 transfer. OK. When I received my first statement I sent in the $4000 purchase balance, expecting to find an exact $10,000 balance on my next statement. Whoops. The statement shows a balance of $10,063.45 (and a posting date a day after the payment was due, even though my tracking number says it was delivered 2 days early).

Bottom line, it wasn't a late fee & interest they were trying to ding me for, it was because they applied 100% of my payment to the 0% balance and not to purchases. I had heard of applying certain percentages to this and certain percentages to that, but this was the first time I've ever heard of applying all of your payments to the balance with the lowest percentage rate (which in this case was zero). The "account manager" (their name for the front line people) I spoke with agreed to waive the finance charge, but I'm sure they won't do that next month, or the month after that...

While I admit that it's at least partly my stupidity for being in this situation, my feeling is that Barclays Bank is totally out to screw the customer bigtime with their policy of applying 100% of your payment to the balance with the lowest percentage rateApplying part of your payment to the balance with the lowest rate is one thing (don't particularly care for that much either), but to apply it allto the zero percent balance is why banks need to be regulated.

While I'm not defending the practice in general, all credit card companies apply payments to the portion of your balance with the lowest interest rate. It isn't just the Barclays card.

Good warning, though, for folks who might not realize it.

While I'm not defending the practice in general, all credit card companies apply payments to the portion of your balance with the lowest interest rate. It isn't just the Barclays card.

Good warning, though, for folks who might not realize it.

This is true. If you do a balance transfer at a low rate, you pretty much have to shut down usage of that card.

The OP also warned about them holding payments and posting them one day after the due date to generate interest and late charges. I also had that experience.

I pay all credit card bills in full within 2 days of receipt of the bill. On my fourth monthly bill with the US Air Mastercard, they claim my payment was received one day late. It was mailed ten days before the due date.

When I called, the agent immediately waived the late fee and interest. This seemed to confirm that they knew they had posted many payments late. I have never used the card since then. That was sad for me because they were giving 1.5 miles for every dollar. But I didn't want to bank with someone who I felt was holding payments until one day after the due date to create fees.

Beware of this bank.

Having worked at a major credit card issuer, I can tell you that it is very unlikely they would intentionally hold payments to generate fee revenue. The potential regulatory trouble is just not worth it.

Having mailed your payment 10 days before the due date and being slapped with a late charge, I guarantee you the USPS is to blame.

I've always used Juniper's online payment service to deduct from my checking account. You can process a payment on the due date befoe 7pm and it's still on time. I missed that deadline by an hour once and I've not been hit with the fee. Works fine!

Every credit card applies payments to the lower interest balance first.

EVERY credit card I've ever had does exactly the same thing. Payments are applied to lowest APR balances first.

It's a good reminder to always read the entire terms and conditions to make sure there is nothing that will bite you unexpectedly.

The OP also warned about them holding payments and posting them one day after the due date to generate interest and late charges. I also had that experience.

I was thinking about getting this card, but don't want any trouble with payments posting late. I pay all of my current credit cards online to avoid any problems of it being late due to the mail or possibly the credit card company holding the payment. Doesn't Barclays have online bill pay?

The only issue I have with this card (a new cardholder here) is that I never got an email letting me know that my statement had closed. I happened to check my Dividend Miles account and saw the miles posted, which prompted me to check my card balance. I did verify that I have my options setup for email notification, and have the correct email address. I caught it in plenty of time to do an online payment, so it isn't a major issue.

The strange thing is that I have the same type of options for my Hilton Honors AMEX, and that works like clockwork, absolutely no issues.

My emails from US Airways in general are hit or miss, so I'm wondering if this is at all connected with that issue.

Anyone have any feedback?

The only issue I have with this card (a new cardholder here) is that I never got an email letting me know that my statement had closed. ..

My experience with the Barclays MC is exactly the opposite - I get too many emails from them. I prefer the paper statements, and so.... first I get an email saying I got a bill and it can be viewed online. Then 10 days or so before the due date, I get another reminder email that the bill is due. I send in a check snail-mail, and a few days later I get another email saying they've received payment. So far, I have not been dinged for a late payment sent the old-fashioned way a week or so before the due date.

I used to have a problem receiving emails from US, but that's now solved. I seem to receive everything...upgrade email notification, statements, etc

I was thinking about getting this card, but don't want any trouble with payments posting late. I pay all of my current credit cards online to avoid any problems of it being late due to the mail or possibly the credit card company holding the payment. Doesn't Barclays have online bill pay?

I have had this card for a year. I have scheduled a recurring payment online of the statement balance on each due date. Now, I don't have to do anything each month to pay my bill--it's taken care of automatically. I also get e-mails reminding me that the scheduled payment is coming up.

they applied 100% of my payment to the 0% balance and not to purchases. I had heard of applying certain percentages to this and certain percentages to that, but this was the first time I've ever heard of applying all of your payments to the balance with the lowest percentage rate (which in this case was zero).

my feeling is that Barclays Bank is totally out to screw the customer bigtime with their policy of applying 100% of your payment to the balance with the lowest percentage rate

As has been said:

Every
Other
Card
Does
This!

It is in the T&C... Sorry you got caught out.

Having worked at a major credit card issuer, I can tell you that it is very unlikely they would intentionally hold payments to generate fee revenue. The potential regulatory trouble is just not worth it.

It is always nice to have input from insiders, so thank you for your comments.

IMHO, this has been common practice for many credit card companies (no doubt, not the fine company you worked for) and some have gotten nailed. The example that comes to mind is Providian which was was essentially destroyed a few years ago (may be back in a new and different form with different management and practices) after the San Francisco District Attorney, with help from consumer groups who provided info, went after them for straight out cheating card users by not posting payments on time and sticking on late fees to enhance profits. For more info see, e.g., http://www.pirg.org/consumer/bankrupt/bankrupt2.htm or http://www.lieffcabraser.com/providian.htm

Interestingly, the Federal Banking Regulators tried to protect Providian and its illegal activities and only joined the SF D.A. after there was lots of press. Evidently the initial evidence came from the Oakland Better Business Bureau's complaint files, so, I guess it can pay to complaint to the BBB.

I was thinking about getting this card, but don't want any trouble with payments posting late. I pay all of my current credit cards online to avoid any problems of it being late due to the mail or possibly the credit card company holding the payment. Doesn't Barclays have online bill pay?

There is online bill pay from the website.

I pay via one of two methods -- if I'm paying the balance at the absolute last minute, I'll use the web site before 7 PM on the due date. If I'm not waiting until the last possible moment, I'll use my bank's online billpay service and send an electronic payment that way.

Neither of the two methods has resulted in a problem for me. No interest or late charges ever in the 13 months I've had the card. I've also had the occasion to call them once or twice and they've been most helpful and efficient on the phone, although once I was alerting them to travel in Egypt and the other time I was adding an authorized user so they weren't the most involved of calls.

Checkfree (online billpay from your bank checking account) to barclays is electronic and generally takes one business day to post. I use HSBC. Convenient as all hell.

People should learn to read their agreements. If you fail to read the contract that you are signing up for, whatever happens you deserve.

I personally love Barclays, they have been very fair with me.

I've had this card for almost a year, as I wanted to boost my US miles. I'm very satisfied and have yet to have a problem. My payments always post a few days after mailing them.

I haven't had any serious problems with them. However, now that the introductory 1.5 miles on everything are ending, I'll have to reconsider how much I'll use it.

Hi all!
First post, Im just a lurker working on gold preferred (at 42K miles) so I like to read what yall think. Anyway, as others have mentioned it is standard practice to apply payments to lowest APR balances.
A bigger concern with the US Airways credit cards is the BoA version. With the recent merger of BoA and MBNA, the MBNA computer system has taken over and MBNA does *not* process payments on the weekends. That means, if your due date falls on sat or sun, schedule your payment for friday or it will be late with a hefty 39 charge. The BoA CSRs will remove it though if you call.

Ill slink off back to my corner.

It is always nice to have input from insiders, so thank you for your comments.

IMHO, this has been common practice for many credit card companies (no doubt, not the fine company you worked for) and some have gotten nailed. The example that comes to mind is Providian which was was essentially destroyed a few years ago (may be back in a new and different form with different management and practices) after the San Francisco District Attorney, with help from consumer groups who provided info, went after them for straight out cheating card users by not posting payments on time and sticking on late fees to enhance profits. For more info see, e.g., http://www.pirg.org/consumer/bankrupt/bankrupt2.htm or http://www.lieffcabraser.com/providian.htm

Interestingly, the Federal Banking Regulators tried to protect Providian and its illegal activities and only joined the SF D.A. after there was lots of press. Evidently the initial evidence came from the Oakland Better Business Bureau's complaint files, so, I guess it can pay to complaint to the BBB.

Providian is now Washington Mutual.

I do all of my interaction with the US MC online. I receive statements online and I pay online. The payments post the same day or the day after I submit them. I have also contacted customer service online with no problems experienced to date (I have had the card since April 06). So far, so good.

As has been said:

Every
Other
Card
Does
This!

It is in the T&C... Sorry you got caught out.

Every bank seems to have their own system...Chase divides your payment between balances with some formula they have, but it does not all go to the lowest interest rate balance..

This is MC related--

I kept waiting for the 10K miles to appear on my preferred miles status report (yes, I know that these are not additional DM miles but just for additional preferred status). I easily surpassed the $25K minimum charged for this benefit--but I charged much of it in December and it was not billed or paid until January. When I printed the annual summary the total shown for the year to date charged was incorrect--it was the amount paid during the year. I called the service number (earlier today) the two people with whom I talked agreed that I had in fact charged enough to deserve the 10K benefit. Now I'll see if the 10K are applied and if not how many more calls it will take.

This is very significant because without that bonus I have 91K miles for 2006.

I was in Charlotte airport and there was a table to sign up for USair MasterCard by Barclays, th free round trip offer is using the miles they offer and it is not additional to the miles, as the person who signed me for it told me. Also note the free Silver Elite offer is for 90 days but does not activate till you make a purchase and pay the fees, its more than 2 weeks already and i have not even received the card.....they do not tell you all these or give you in writing....:td:

I was in Charlotte airport and there was a table to sign up for USair MasterCard by Barclays, th free round trip offer is using the miles they offer and it is not additional to the miles, as the person who signed me for it told me. Also note the free Silver Elite offer is for 90 days but does not activate till you make a purchase and pay the fees, its more than 2 weeks already and i have not even received the card.....they do not tell you all these or give you in writing....:td:

Not sue about the free silver but the free round trip that comes in the form of a 25K mile bonus is clearly spelled out in the terms - may be in fine print, but it's there - and that's how the majority of airline credit card "free round trip tickets" are given out.