Consumer complaint received 2019-06-13
Company: Bread Financial Holdings, Inc.
State: CA
Product: Credit card or prepaid card
Sub-product: Store credit card
Issue: Advertising and marketing, including promotional offers
Sub-issue: Confusing or misleading advertising about the credit card

Complaint:
XXXX XXXX actively promotes the " XXXX Members Program Preferred Financing Plans. '' The plans are as follows : Members of the XXXX Members Program can enjoy No Interest for 12 Months, 0.99 % APR for 24 Months, 1.99 % APR for 36 Months, 2.99 % APR for 48 Months, or 3.99 % APR for 60 Months. 

27.24 % Standard Variable Purchase Rate thereafter, if balance not paid in full within promotional period, which can occur if you fail to make a payment when due. * No Interest for 9 Months for U.S.  Outlet in-store purchases. 

No annual fee Standard variable Purchase APR of 27.24 %, based on the Prime Rate. Minimum interest is US {$2.00} per credit plan. 

* Minimum payment set for repayment within the number of months of the plan, sooner for smaller balances. Minimum payment due on the account will not be less than US {$30.00}. Minimum Interest Charge : US {$2.00} per credit plan. Subject to credit approval. If multiple items are  purchased on a promotional plan and they ship separately, each item will be placed on a separate promotional plan. XXXX XXXX Credit Card Accounts are offered by Comenity Bank which determines qualifications for credit and promotion eligibility. Offer subject to change without notice. 

I made several purchases totaling approximately {$30000.00} between XX/XX/XXXX - XX/XX/XXXX. The balances were separated into over 10 sub-accounts. I scheduled auto-payments of $ XXXX {$2500.00} / month to try to take advantage of the " No Interest for 12 Months promotion. '' I had figured the auto-pay would bring my balances down to XXXX over time to avoid paying interest. 

This month, I began to notice some irregularities on my statement so I called the customer service line to review. I was notified that there were a couple sub-accounts that were past their promotion period and that I would owe a full year interest on the original purchase amount at an incredibly high APR. I asked what I could do to avoid the issue from happening again and was notified that I needed to continue paying the large minimum payments ( which are arbitrarily set ) and submit a separate payment for each sub-account and then call directly to the call center to tell them which sub-account to allocate the payment towards. As it turns out, each of my payments were used to pay off ALL of the sub-accounts pro-rata, rather than allocated towards the ones that were coming due sooner to avoid interest. I was notified that there is no other way to do it. They also notified me that if they were to take payment directly over the phone that there would be additional fees charged. 

Not only is the promotional plan incredibly deceptive, Comenity has gone above and beyond in making it incredibly difficult to pay off balances to avoid interest. 

As a result, I paid off my full balance on XX/XX/XXXX because it would be impossible for me to try and manage this program - frankly, I still do not understand how the minimum payment is set and how the payments are allocated and interest is calculated.

Company response to consumer: Closed with explanation