Cap 1 Balance Transfer - Is this basically a rip off?

[EW800]

I have no CC debt, therefore no need for a BT, however I received an e-mail from Capital One this morning that I decided to read, just to see what they were offering.  Maybe all BT work this way, however if I am reading this correctly, this sounds like a REALLY bad idea to me....  It looks to me like it is saying that if you accept the offer, all new purchases will be charged interest, even if paid in full, unless the BT is paid off as well.  Is that how you read it?  If so, in my mind, that is NOT a good deal.  Sounds like even if paying everything else in full, new purchases will be charged interest.  Quite a deal for Cap1!

With a balance transfer at 0% APR for 18 months, more money can go to what you owe.

For your existing account ending in: 

E,

A balance transfer with Capital One® could help you save money by minimizing the amount you pay in interest—with only a few simple steps.

1.	Transfer your balance online before May 13, 2015.
2.	Start saving on interest with 0% APR for 18 months.
3.	Simplify your finances with fewer payments to manage.

You can use the money you save on interest to pay down your balance faster. After 18 months, your rate will simply go to your purchase rate, which is currently 9.90%. It’s that easy. You’ll pay a balance transfer fee of 3% of each transaction amount.

Note > Please Read: If you accept this offer, you will pay interest on all purchases made with your credit card until your entire balance is paid off. See Important Tip below.

IMPORTANT TIP to avoid paying interest on new purchases:

If you pay your balance in full each month, you do not pay interest on your purchases. Please note, after you accept this offer, you will begin paying interest on all new purchases, even if you pay your purchase balance in full each month. To avoid paying interest on new purchases, you must pay your total balance in full (including balances from this offer) by the due date each month.

[onstar]

That's standard jargon. Also found in Discover and possibly everyone else.

Reference:

https://www.discovercard.com/application/terms?srcCde=KB48

EDIT:

1. Removed Barclay link.

2. This might be legacy wording? Last I checked this was made illegal back around 2010 with the credit card reform act. Supposed to be the miminum payment amount will go toward whatever the bank sees fit (probably towards the 0% that you BT), but all amounts above the minimim payment due is supposed to go towards the balance of the highest interest rate. This process continues until the last 2 months of the promo 0% period when all payments go towards the 0% promo balance. I'm sure there is a thread about this somewhere. 

[JSS3]

Chase charges interest on purchases during BTs too. 

To avoid interest, you'd need a 0% purchase and BT period.

[Ghoshida]

Every lender has the same wording. Citi even charged me interest. I had paid for the charge as soon as it posted, so about 3 days. They charged me the minimum interest charge of $0.50 which I got reversed by messaging. But they were clear that the policy remains.

Barclay is the only one that does not charge interest on new purchases as long as the new purchases are paid in full.

None of these matters if you have both a promo purchase and BT APR.

[longtimelurker]

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@onstar wrote:

That's standard jargon. Also found in Discover and possibly everyone else.

Reference:

https://www.discovercard.com/application/terms?srcCde=KB48

EDIT:

1. Removed Barclay link.

2. This might be legacy wording? Last I checked this was made illegal back around 2010 with the credit card reform act. Supposed to be the miminum payment amount will go toward whatever the bank sees fit (probably towards the 0% that you BT), but all amounts above the minimim payment due is supposed to go towards the balance of the highest interest rate. This process continues until the last 2 months of the promo 0% period when all payments go towards the 0% promo balance. I'm sure there is a thread about this somewhere. 

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It doesn't violate CARD provisions.  As you  say. part of that act defines how payments above the minimum must be credited, but since you owe a balance they are not forced to give you a grace period for purchases.

[onstar]

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@longtimelurker wrote:

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@onstar wrote:

That's standard jargon. Also found in Discover and possibly everyone else.

Reference:

https://www.discovercard.com/application/terms?srcCde=KB48

EDIT:

1. Removed Barclay link.

2. This might be legacy wording? Last I checked this was made illegal back around 2010 with the credit card reform act. Supposed to be the miminum payment amount will go toward whatever the bank sees fit (probably towards the 0% that you BT), but all amounts above the minimim payment due is supposed to go towards the balance of the highest interest rate. This process continues until the last 2 months of the promo 0% period when all payments go towards the 0% promo balance. I'm sure there is a thread about this somewhere. 

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It doesn't violate CARD provisions.  As you  say. part of that act defines how payments above the minimum must be credited, but since you owe a balance they are not forced to give you a grace period for purchases.

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Is that true??? From experience, I know that Amazon Store Card and Barclay don't charge interest like that. You still get a grace period even if you have promotional balance (Amazon was promotional financing; Barclay was promotional rate on BT). I thought it was because of the law, not because it is their policy.

[gdale6]

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@onstar wrote:

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@longtimelurker wrote:

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@onstar wrote:

That's standard jargon. Also found in Discover and possibly everyone else.

Reference:

https://www.discovercard.com/application/terms?srcCde=KB48

EDIT:

1. Removed Barclay link.

2. This might be legacy wording? Last I checked this was made illegal back around 2010 with the credit card reform act. Supposed to be the miminum payment amount will go toward whatever the bank sees fit (probably towards the 0% that you BT), but all amounts above the minimim payment due is supposed to go towards the balance of the highest interest rate. This process continues until the last 2 months of the promo 0% period when all payments go towards the 0% promo balance. I'm sure there is a thread about this somewhere. 

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It doesn't violate CARD provisions.  As you  say. part of that act defines how payments above the minimum must be credited, but since you owe a balance they are not forced to give you a grace period for purchases.

---

Is that true??? From experience, I know that Amazon Store Card and Barclay don't charge interest like that. You still get a grace period even if you have promotional balance (Amazon was promotional financing; Barclay was promotional rate on BT). I thought it was because of the law, not because it is their policy.

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Yes its true, its up to a creditor if they want to give you a grace period on new puchases when you are carrying a balance for other reasons.