I want to start off with a definition of prepayment because it can mean 2 things. Inside the definition of “BREAK DOWN” I added some emphasis
DEFINITION of ‘Prepayment’
The satisfaction of a debt or installment payment before its official due date. A prepayment can be for the entire balance or for any upcoming payment that is paid in advance of the date for which the borrower is contractually obligated to pay it. Examples of a prepayment come in the form of rent or early loan repayments.
BREAKING DOWN ‘Prepayment’
There are many types of debts and obligations that can be settled in advance through prepayment. Consumers can use prepayments on tax forms to settle future tax obligations, they may prepay credit card charges before they receive a statement and sometimes many prepay loans through refinancing. It’s always a good idea to make sure that prepayment is allowed without penalty for mortgages, or, if there is a penalty that it’s only for a few years.
Read more: Prepayment Definition
I think this is pretty straightforward definition and is black and white. What if I told you that if you prepaid your credit card and you would not earn points? I am here to tell you it happened to me, and I am not happy so watch out.
What Happened To Me
One (1) Elevate Reward Point for each $1.00 of Net New Purchases made everywhere else the Card is used, rounded to the nearest dollar, including but not limited to purchases of Gogo in-flight internet sessions or subscriptions, and hotels, cars, vacations or cruises booked through virginamerica.com.
It looks like Comenity needs to fix their programming logic to issue points because I did not earn 1 point for every “$1 of Net New Purchases”. They are issuing points at whatever the statement balance is for the month. I set up my Comenity issued Virgin America credit card on cruise control and every month, I will load up my US Bank Visa Buxx. Here are some examples from June to August.
See that? 1042 new points
972 new points.
Both the June and July statements add up, net charges add into the points. Now let’s look at August
1006 new points on $2011.99 charges. I prepaid $1004.49 because I also had a $7.50 balance. The math for my new points certainly don’t make any sense. I prepaid it down to the statement balance to be $1000.
I will wait until September’s statement to close to reach a conclusion to see if the points will catch up. I will also prepay again and see what happens. If the points don’t catch up and I am losing more points, I certainly don’t want to entertain the idea of a CFPB and have Comenity look at my purchases. Thanks, but no thanks. Who knows what else could happen, the gravy train with Comenity could end if I submitted a CFPB. Someone else who lost points from more legitimate purchases should submit something to CFPB.
Potential Class Action Lawsuit?
Who knows how Comenity set up all the other credit cards. I’m assuming they use the same algorithm to issue points. If someone who is not paying enough attention to the points earning and is prepaying the credit card, they could be earning less points than what they are owed.. Definitely interesting to keep an eye on. We’ll mark this as developing. I’ll play around with my other Comenity card to see if this happens as well.