Consumer complaint received 2023-07-27
Company: DISCOVER BANK
State: CA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Other features, terms, or problems
Sub-issue: Problem with balance transfer

Complaint:
Two types of balances on my account ; " Purchases '' with XXXX XXXX  and " Balance Transfer '' XXXX XXXX. ( statements attached ) On my XX/XX/XXXX statement Purchases {$2200.00} ... Balance Transfer {$2800.00} with Min Payment Due {$100.00} ... .My goal was to payoff the balance incurring interest so I made {$2400.00} payment on XX/XX/XXXX. The minimum payment amount is first applied to the XXXX XXXX balance any amount leftover is applied to the Purchase / Interest Incurring amount... 
Therefore ( IF it was working correctly ) : {$2400.00} - {$100.00} ( min due applied to Balance Transfer Balance ) = {$2200.00} remains to be applied to Purchase Balance of {$2200.00} resulting in {$0.00} Purchase Balance and {$93.00} left over to be applied back to the remaining Balance Transfer Balance... 
After this payment is properly applied the remaing balances should look like this : Purchases {$0.00} ( {$2200.00} - {$2200.00} = {$0.00} ) Balance Transfer {$2600.00} ( XXXX - {$100.00} - {$93.00} = {$2600.00} ) ******************************************************************************* HOWEVER this is what actually showed on my next/current statement dated XX/XX/XXXX : Purchases {$530.00} ( which also now incurs 27.99 % interest {$12.00} ) Blance Transfer {$2600.00} ******************************************************************************* When you do the math comparing before and after totals you can see how the {$2400.00} was incorrectly applied : Prior Purchase {$2200.00} - Current Purchase Balance {$530.00} = {$1600.00} was applied Prior Balance Transfer {$2800.00} - Current Balance Transfer Balance {$2600.00} = {$200.00} was applied ..... 
First problem : Add the two " applied '' amounts ( {$1600.00} + XXXX = {$1800.00} NOT {$2400.00} ... it's {$510.00} short??? 
Second problem : Because the Current Purchase Balance was not {$0.00} as it should be it generated interest ... My account is set to auto-pay the minimum due so if I wasn't paying attention to this error, the next minimum payment {$52.00} will only be applied to the 0 % interest " bucket '' and the interest " bucket '' will keep incuring interest on interest ... a vicious circle! 
Now, we could assume if I attempt to fix this problem again, I can make a {$100.00} payment, exceeding the {$52.00} min due, and {$52.00} would go to Balance Trransfer and {$48.00} would go towards the remaing interest BUT we can clearly see that did NOT happen when I paid {$2400.00} so why would I assume it would work correctly with {$100.00} payment??? 
********************************************************************************* When customer with two types of balances sends in payments exceeding the minimum payment due the remaining amount is NOT being applied to the interest bearing amount as it should be. Instead it creates a vicious circle of interest upon interest which is not within the law / contractual agreement. 
On XX/XX/XXXX I spent almost XXXX hours on the phone with DISCOVER, explaining the math to rep, who transfered me to billing, who transfered me to her manager where my call was dropped, so back into the queue where I got another rep where I had to explaint the math AGAIN to get transferred to another supervisor, XXXX, who understood the issue, credited me the {$12.00} interest promissing that it cleared the " Purchase/Interest '' bucket and no more interest will be incurred ... I will see on my next statement XX/XX/XXXX ... I went a step further and made {$100.00} payment today ; {$52.00} min + {$48.00} to cover more than enough IF there is interest on next statement XX/XX/XXXX... assumming the system works correctly next month. 
I'm filing this complaint today because my large {$2400.00} payment was applied very incorrectly. Their system is obviously not appling payments correctly when there are two types of balances and the system needs to be fixed ... .If I had not been diligent I would fall into the " interest upon interest '' scenerio. Many customers do NOT understand how this should work and easily will miss this mistake which LARGELY FINANCIALLY FAVORS the business not the consumer.

Company response to consumer: Closed with explanation