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Capital One’s transfer mess

By Janna Herron · Bankrate.com
Friday, January 6, 2012
Posted: 4 pm ET

A national law firm is still soliciting consumers who were allegedly wronged by the "viking" credit card company.

Hagens Berman is looking for more names to add to a consumer-rights class-action lawsuit filed against Capital One in June. The lawsuit alleges the issuer misrepresented its zero percent balance-transfer offer when it applied payments meant to pay off new purchases to the transfer balance instead. Consumers were left with hefty interest charges each month even though they thought they paid off the new purchase balance in full.

Capital One did not immediately respond to an email for comment on the lawsuit.

Now I did a little sleuthing myself and came across Capital One's credit card agreement on the Consumer Financial Protection Bureau's database of credit card agreements (a handy little site, I might add).

The agreement says: "We apply your minimum payments to lower Annual Percentage Rate balances before higher ones. We apply any portion of your payment, in excess of your minimum payment, to higher Annual Percentage Rate balances before lower ones."

This is completely in line with requirements found in the Credit Accountability, Responsibility and Disclosure Act of 2009, or CARD Act, to apply any money above the minimum payment to the most expensive balance.

I guess the question is: What was the minimum payment on the account?

Of course, we don't know how it will all shake out, but the lawsuit highlights the importance of reading the fine print of any credit card offer, says John Ulzheimer, the president of consumer education at SmartCredit.com.

"If I've learned one indisputable fact in my years following the credit industry," Ulzheimer says, "it's that the big print giveth and the small print taketh away."

So, put your reading glasses on and find out the unexpected surprises in your credit card agreement. And then tell me about them.

Follow me on Twitter: @JannaHerron.

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