October 19, 2009
-
Finding 0% APR CCs, Pt.3
Sometimes you eat the bear; sometimes the bear eat you.Now for the real meat and potatoes, the two categories that matter most. These issues have to be discerned to ensure that a credit card offer will help you, not hurt you. Pain avoidance first:
<(O)> Bear Traps (trickery): Terminology can be a tricky thing. Usually it's not a problem. It's those rare exceptions that tend to "drill you". Note even this...the term "drill you" here doesn't mean train you as in a military drill. It's to bore into your wallet. "Coined terms" that seem harmless can have obscure adjectives. Like "Special interest rate*" embedded deeply in the fine print. Just what does "Special" imply? After all, the word usually signifies something good, so why worry? Here's why:
Say you've just closed a deal with Capital One for a 0% APR on both purchases and balance transfers credit card account. Of course, you take advantage of the great balance transfer deal, so you initiate one immediately. When your first statement arrives, it's pleasant to note that the balance transfer has gone through successfully. Reading a little further down, you're suddenly taken back. "What's this 19.99% APR charge doing applied to my $3,000 transfer?" You're certain of a mistake and confident it will be fixed with a simple phone call. Not gonna happen.
It will be explained to you that, yes, balance transfers carry a 0% APR. But, did you read the fine print? I know you didn't because it wasn't there. You were supposed to ask over the phone at the time the account was opened what "Special interest rate" meant. So they explain it to you now. "Special interest rates" apply to balance transfers which take place when opening the credit card account. You opened the account and took advantage of their "0% APR Special". Any balance transfers which take place when you accept this "special deal" are given the "Special interest APR", 19.99%.
Now, you can never charge on the card without locking yourself to the full brunt of the $3,000 @ 19.99 APR hammering you every month. Your payments only apply toward the 0% APR charges before being applied toward the high APR balance. You must completely pay off the $3,000 (with interest) before you can enjoy that 0% APR (which is exactly what I did, that same day). Who'da thunk it?.