Bank Act (S.C. 1991, c. 46)

Marginal note:Different interest rates — allocation of payment

• 627.35 (1) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account that is opened in Canada by a natural person other than for business purposes, the institution shall allocate any payment made by the person that is greater than the required minimum payment for that billing cycle among those amounts using one of the following methods:

  • (a) by allocating that payment first to the amount with the highest interest rate and then allocating any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates; or

  • (b) by allocating that payment among those amounts in the same proportion as each amount bears to the outstanding balance owing on the credit card account.

• Marginal note:Rounding and adjustments

  (2) For the purpose of paragraph (1)(b), if the payment that the institution allocates to an amount owing on a credit card account contains a fraction of a dollar, the institution may round up that amount to the nearest dollar if the fraction of the dollar is equal to or greater than 50 cents, round down that amount to the nearest dollar if the fraction is less than 50 cents and, if necessary, make corresponding adjustments to the other amounts that are being allocated.