January 20, 2009
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News: Watch the ‘Gotcha' CC Promos.
I'm sure that many of us out there are taking advantage of the lavish 0% interest promo credit card offers that we've been showered with over these last many years. For those who are savvy and read the fine print, they have been working out rather well. But, lest we forget, the credit card lenders are not exactly fools and know they must turn profits to stay in business. Every now and then, one of us will get caught in the credit card capture net. So, let's try to help each other out and share the snares.
It's pretty common knowledge among the savvys of how dangerous it is to miss a payment or to let time run out. Also, most know (or have learned) about the Balance Transfer 0% promos and the, now-un-capped Transfer fees. We also know about the trap where, if we make any purchaces at all against such a credit card that, from that point on, we will never be able to pay on that one purchase until the entire credit card balance has been paid off. We will incur a finance charge against that lone purchase every single month until that time.
What we may not know about is the twist that comes with private-label credit cards. Since these cards mostly focus on making sales from the main business, companies like sears, Macys and JC Penny will present promotions based on high-dollar sales with the promotional advantage of zero interest for a year for that sale. What some don't readily think about is that, if they make any further purchases on that card, all their payments from that point will only be applied only toward the non-promotional purchases until those are all paid off. So, just paying off the entire amount of the original promotional purchase a month before the time is due will not save them from the big jump in ‘deferred' interest (it's only 0% if paid off before due-date). Because payments aren't applied against the promo purchase until all else has been satisfied, you will be nailed with a year's worth of ‘deferred' interest on your very next billing statement following the promo's expiration. Watch out!