Consumer complaint received 2019-10-20
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: VA
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 rewards from credit card

Complaint:
I have the Bank of America Cash Rewards credit card. This card offers cash back based on a percentage of the value of items purchased using the card. I have a cash balance in the rewards program because I only tap into that reward every 18-24 months. 

On XX/XX/XXXX, I elected to transfer an amount from my Bank of America Cash Rewards account that was equal to the statement balance due on that credit card for XX/XX/XXXX. Because the reward account equals cash, it was my understanding that in transferring the {$460.00} from my rewards account into the credit card account, I had made the payment of the full statement balance due on that credit card for XXXX. 

My payment for XXXX was due on XX/XX/XXXX. On XX/XX/XXXX, BOA executed the cash transfer from my rewards account to the credit card as I had directed. However, on XX/XX/XXXX, I noticed that the bank was still showing that I had not made even the minimum payment due for XXXX for that credit card. I called BOA and was told that the {$460.00} cash transfer from my rewards account into my credit card did not count as a payment on the XXXX statement balance, but was only a credit on my credit card account. Further, the Bank of America representative told me that I was still responsible for making the {$110.00} minimum payment by XX/XX/XXXX, or would face a late fee, a finance charge on the {$460.00} balance due, plus a report to the credit bureaus if the eventual minimum payment was more than 30 days late. The bank representative also told me that their policy is to treat a cash transfer from the rewards account into the credit card balance as a CREDIT to the balance due - and not as a PAYMENT of the balance due. I do not understand the difference, as any payment I make to a creditor is treated as a credit of the balance due on my account. 

This policy defies logic and is unfair and unconscionable. Its effect is to make the consumer pay more than is due when they redeem their cash reward and direct that it be applied to the credit card balance. In my case, for example, I had to pay the total balance of {$460.00} again yesterday ( XX/XX/XXXX ) in order to avoid the negative consequences described above if my payment was not received by XX/XX/XXXX. This means that Bank of America required me to pay double the total amount due on my statement balance for XXXX : on XX/XX/XXXX, I made the full payment of {$460.00} by transferring cash from the Bank of America Cash Rewards account into the Bank of America Cash Rewards credit card account ; and on XX/XX/XXXX, I was forced to make another payment of {$460.00} from my personal funds. The effect of this is that Bank of America forced me to overpay my XXXX statement by {$460.00}. I am fortunate to have that extra money available to make this senseless double payment and avoid BOA 's penalties. However, had I been someone living paycheck-to-check and relying on my cash earned through the Cash Rewards program to make my payment this month, I would now be facing late fees, interest on the full balance due, plus a negative credit report. 

This policy of the BOA Cash Rewards program of not treating cash transferred from the Cash Rewards program to pay the statement balance due on the BOA Cash Rewards credit card is unjust and extremely prejudicial to consumers. As an example of how absurd the policy is, the bank manager at BOA told me yesterday that if I had transferred the cash from my Cash Rewards account into my checking account, and then paid the BOA Cash Rewards credit card balance from my checking account using that cash, this extra step would have gotten me to where I had intended to be. In essence, BOA expects ( 1 ) the consumer to know that there is an extra step required for cash to be treated as cash - a step that is not disclosed anywhere in its terms and conditions, and ( 2 ) the  consumer and the bank to each add a step - that of funneling the cash reward through the checking account - in order for cash to be treated as cash for purposes of paying the balance due on the credit card associated with the rewards program. I know of no other program that refuses to treat cash applied in payment of a balance due as anything other than a cash payment of that balance due.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation