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Hi everyone.
Does anyone have any experience with Chase CSP promotional interest-free balance checks? I got a mailing from them this week that's offering an interest-free deal if I use the attached pre-printed Chase checks, which I assume is drawn on my CSP card account.
The letter offers "0% promotional APR Balance Transfers through your billing cycle that ends 03/2017...After that, your standard APR will apply, which is currently 15.99%."
So I can use the checks to pay off other credit cards, or make a purchase with them, or use the checks as cash to myself as interest-free loan for 14 months. Is this right?
The other thing I'd like to get clarification is this line: "Once you take advantage of this offer, you will have a new promotional balance on your account. As a result, you will lose your interest-free period (also called your grace period) on new purchases unless you pay your entire balance in full every month (including any promotional balances that you add by using this offer.) This means that while you will enjoy the promotional rate on the balances that you add by using this offer, you will pay interest on your new purchases."
Wouldn't I be paying interest on new purchases anyway, if it wasn't paid for by these promotional checks?
I usually PIF this card, and the balance is currently zero.
Am I missing anything? Will this hurt my credit or my standing with Chase in anyway? (Obviously there's the hit on utilization.)
Thanks.
@Anonymous wrote:Hi everyone.
Does anyone have any experience with Chase CSP promotional interest-free balance checks? I got a mailing from them this week that's offering an interest-free deal if I use the attached pre-printed Chase checks, which I assume is drawn on my CSP card account.
The letter offers "0% promotional APR Balance Transfers through your billing cycle that ends 03/2017...After that, your standard APR will apply, which is currently 15.99%."
So I can use the checks to pay off other credit cards, or make a purchase with them, or use the checks as cash to myself as interest-free loan for 14 months. Is this right? - Yes, that's exactly what you can do
The other thing I'd like to get clarification is this line: "Once you take advantage of this offer, you will have a new promotional balance on your account. As a result, you will lose your interest-free period (also called your grace period) on new purchases unless you pay your entire balance in full every month (including any promotional balances that you add by using this offer.) This means that while you will enjoy the promotional rate on the balances that you add by using this offer, you will pay interest on your new purchases."
Wouldn't I be paying interest on new purchases anyway, if it wasn't paid for by these promotional checks? - Yes but sometimes people think that they can make purchases and it would be covered under the 0% offer or don't make a significant enough payment to cover those purchases. If you charge for example something for $100 you want to pay the $100 back or you'll stat paying interest.
I usually PIF this card, and the balance is currently zero.
Am I missing anything? Will this hurt my credit or my standing with Chase in anyway? (Obviously there's the hit on utilization.) - You identified the utilization factor so that's covered. You also dont want to make minimum payments. Otherwise you should be fine.
Thanks.
Thanks for your answers.
My other question is, is this looked at differently by an underwriter than from taking a huge cash advance? They're not even making interest on it.
What's the incentive for a lender to do this, other than hoping you'll screw up? If I don't care about my util rate and pay myself the full CL and just have that cash sit around, they've effectively stopped my potential as a profit engine by not getting swipe fees nor interest for 14 months. Even with the rate hike(s) recently and possibly this year, money is still cheap.
@Anonymous wrote:Thanks for your answers.
My other question is, is this looked at differently by an underwriter than from taking a huge cash advance? They're not even making interest on it.
What's the incentive for a lender to do this, other than hoping you'll screw up? If I don't care about my util rate and pay myself the full CL and just have that cash sit around, they've effectively stopped my potential as a profit engine by not getting swipe fees nor interest for 14 months. Even with the rate hike(s) recently and possibly this year, money is still cheap.
Yes, it's looked differently than a cash advance.
I assume that enough people put large amounts on their cards using these checks and/or balance transfer and then don't pay it off before interest starts accruing. Then it becomes very profitable for the banks.
@Anonymous wrote:
@Anonymous wrote:Hi everyone.
Does anyone have any experience with Chase CSP promotional interest-free balance checks? I got a mailing from them this week that's offering an interest-free deal if I use the attached pre-printed Chase checks, which I assume is drawn on my CSP card account.
The letter offers "0% promotional APR Balance Transfers through your billing cycle that ends 03/2017...After that, your standard APR will apply, which is currently 15.99%."
So I can use the checks to pay off other credit cards, or make a purchase with them, or use the checks as cash to myself as interest-free loan for 14 months. Is this right? - Yes, that's exactly what you can do
The other thing I'd like to get clarification is this line: "Once you take advantage of this offer, you will have a new promotional balance on your account. As a result, you will lose your interest-free period (also called your grace period) on new purchases unless you pay your entire balance in full every month (including any promotional balances that you add by using this offer.) This means that while you will enjoy the promotional rate on the balances that you add by using this offer, you will pay interest on your new purchases."
Wouldn't I be paying interest on new purchases anyway, if it wasn't paid for by these promotional checks? - Yes but sometimes people think that they can make purchases and it would be covered under the 0% offer or don't make a significant enough payment to cover those purchases. If you charge for example something for $100 you want to pay the $100 back or you'll stat paying interest.
I usually PIF this card, and the balance is currently zero.
Am I missing anything? Will this hurt my credit or my standing with Chase in anyway? (Obviously there's the hit on utilization.) - You identified the utilization factor so that's covered. You also dont want to make minimum payments. Otherwise you should be fine.
Thanks.
I read this differently:
" unless you pay your entire balance in full every month (including any promotional balances that you add by using this offer.) This means that while you will enjoy the promotional rate on the balances that you add by using this offer, you will pay interest on your new purchases."
Meaning that unless the $100 in new purchases + the entire amount of the 0% balance is paid you will pay interest on the $100 from the moment you charge the $100.00
See:
"The grace period is the time between when your credit card billing cycle ends and when your credit card bill is due, during which you don’t have to pay interest on your purchases. By law, it must be at least 21 days. You only get the grace period if you aren’t carrying a balance on your credit card. What many consumers don’t realize is that carrying a balance from doing a promotional balance transfer – not just from making purchases – can mean losing the grace period."
@Anonymous wrote:
@Anonymous wrote:Hi everyone.
Does anyone have any experience with Chase CSP promotional interest-free balance checks? I got a mailing from them this week that's offering an interest-free deal if I use the attached pre-printed Chase checks, which I assume is drawn on my CSP card account.
The letter offers "0% promotional APR Balance Transfers through your billing cycle that ends 03/2017...After that, your standard APR will apply, which is currently 15.99%."
So I can use the checks to pay off other credit cards, or make a purchase with them, or use the checks as cash to myself as interest-free loan for 14 months. Is this right? - Yes, that's exactly what you can do
The other thing I'd like to get clarification is this line: "Once you take advantage of this offer, you will have a new promotional balance on your account. As a result, you will lose your interest-free period (also called your grace period) on new purchases unless you pay your entire balance in full every month (including any promotional balances that you add by using this offer.) This means that while you will enjoy the promotional rate on the balances that you add by using this offer, you will pay interest on your new purchases."
Wouldn't I be paying interest on new purchases anyway, if it wasn't paid for by these promotional checks? - Yes but sometimes people think that they can make purchases and it would be covered under the 0% offer or don't make a significant enough payment to cover those purchases. If you charge for example something for $100 you want to pay the $100 back or you'll stat paying interest.
I usually PIF this card, and the balance is currently zero.
Am I missing anything? Will this hurt my credit or my standing with Chase in anyway? (Obviously there's the hit on utilization.) - You identified the utilization factor so that's covered. You also dont want to make minimum payments. Otherwise you should be fine.
Thanks.
I disagree with this. It states he will lose his grace period unless he pays his ENTIRE balance (including the promotional balance transfer), in full each month.
Which makes since, because if you take the offer, technically your account is revolving a balance and you ARE being charged interest. You are just being charged interest at 0%. If you make a charge on the account outside of this offer, it will immediately begin accruing interest, this time at the purchase rate of 15.99%.
Whats the fee.. 3%? Pretty standard offer if that is the case.
Thanks for all your responses.
The fee is actually 2% or $5.
I thought there was a little bit more nuance in the grace period wording, and I'm glad I asked.
So basically, Chase is betting that they'll make money on any non-grace period interest accrual if / when I continue to run the card and that I won't pay off the promotional balance by the deadline; I would be betting that I can sockdrawer the card (or immediately pay any new charges) and pay off the transfer balance by the end of the promotional term.
So assuming that I completely sockdrawer the card until 3/2017, assuming that I pay off any / all of the balance by 3/2017, and assume I make at least minimum payments (or 3x minimum) on the transfer balance until 3/2017, and assuming nothing terrible happens to me in the near future, I'm essentially trading away a good utilization rate for an interest-free loan of 14 months?
@bz386 wrote:
It's not really interest free though. You are just paying 2% interest in the form of a fee... Other than that your summary sounds correct.
So basically, even if I do everything perfectly according to plan, the house still wins.