October 16, 2009
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Woe to Us 0% CC Freeriders, Pt.4
Practiced at the art of deception.For those who may be able to go further and open a new credit card account (categories #1 and #2), there are some further caveats to be aware of:
<O> Hidden land mines in the offer: Deceptive or not, many people end up with something far inferior to what they expected. For example, you may go after an new Discover credit card advertising "0% APR on Purchases and Balance Transfer for 6 months". Just to make sure, you take the trouble to get the phone number to call the credit card issuer direct. Say you're credit card- savvy and ask the agent if there is an even better deal that's not advertised. The agent responds with "Give me a minute to check on that. I'll be right back".
When the agent returns, he or she gives you great news. This credit card issuer will extend the "0% APR" to a full year. Of course, you're excited but, still savvy. You succinctly ask if there are any surprises like fees or complications with a $2,000 Balance Transfer. The agent assures you there aren't. So you provide all your personal data and submit on a recording that you approve of the agreement. Ending the call, you are told to expect your new credit card in a few days, but it could be a little longer. Meanwhile, the calendar is ticking on your old introductory low-interest APR expiration.
Finally, two weeks later you finally receive the credit card. You should sit down before reading the new terms. The letterhead could say "HSBC" instead of "Discover Card Services". Read on to find your new credit limit is only $300 and even that carries a 27.99% APR from the get-go. Caught between shock and frustration, you lay the card down and set out for the long ride of having to face the consequences of time running out on your old account. The expiration date is too close to execute a balance transfer now.
Meanwhile, getting back to the pathetic new credit card you just opened, you receive your first statement a month later. Never having used the card, you don't pay it much mind. Just for grins, you open the statement only to find a balance other then $0.00. Now you owe $10 for an Annual Fee. Watch out.