Issuers Would Have to Fairly Apply Payments to Card Balances

Currently, if a consumer makes a credit card payment, credit card companies apply all payments to the lower interest rate balance that is owed, such as for a low introductory offer, rather than to higher rate debt that may be owed, such as for a cash advance.  This practice prevents the consumer from paying off higher interest balances quickly and adds  unwarranted and costly finance charges to the balance.  The Act would require credit card issuers to apply payments to either the highest interest rate debt or proportionally to both high and low rate debt.