Reply
Contributor
seat3a
Posts: 97
Registered: ‎05-02-2012

Marketwatch's take on 0% CC offers

Hi!

 

Thought this might be an interesting read from today's news:

 

http://www.marketwatch.com/story/0-balance-transfers-arent-zero-cost-2013-08-28

 

Happy Labor Day!

 

 

 

 

Barclay Arrival World MC 10K, Citi AAdvantage 16K, Chase Sapphire Preferred 15K, AMEX Gold Delta Skymiles 16K, Venture One 5K, Discover Direct Rewards (Cap 1) $300, Discover Direct Rewards (Cap 1) $500

Scores: EX 764 EQ 750 TU 809 MyFico 739 Last App 11/13
Established Contributor
Brusilov
Posts: 595
Registered: ‎01-04-2009

Re: Marketwatch's take on 0% CC offers

Furthermore, “some companies will apply your monthly payments first to the balance transfer money and then to any new purchases, which will likely result in you paying interest on the new purchases, since your payments aren’t paying those down,” Campbell says.

 


I don't think that's true.  I thought the CARD Act expressly prohibits companies from doing this anymore.  Payments go to highest interest rate balances first.

                    
    $17.3K          $500              $7K              $15K              $5K             $2300          $3200          $2000          $1500          $1000           $8100

Garden Since: 9.25.2013
Valued Member
slick_shoes_182
Posts: 36
Registered: ‎03-22-2013

Re: Marketwatch's take on 0% CC offers


Brusilov wrote:

Furthermore, “some companies will apply your monthly payments first to the balance transfer money and then to any new purchases, which will likely result in you paying interest on the new purchases, since your payments aren’t paying those down,” Campbell says.

 


I don't think that's true.  I thought the CARD Act expressly prohibits companies from doing this anymore.  Payments go to highest interest rate balances first.


In my experience, they did pay down the 0% offer first, despite the CARD Act. They justified it by saying that the 0% promo balances have regular interest rates greater than or equal to the new non-promotional charges. The fact the balance were currently at 0% didn't matter to them since it was just temporary. I'm not sure that congress or the CFPB has blessed this logic, but that's what BOA is doing, at least... using the non-temporary APR instead of the APR for the most recent statement, or upcoming statement for ranking which card to pay down first (which works out in the bank's favor, not the consumer's).

Contributor
seat3a
Posts: 97
Registered: ‎05-02-2012

Re: Marketwatch's take on 0% CC offers

I believe that MarketWatch is correct because we know the banks' present reputations are less than stellar.

 

I shared my original link as these forums have helped me so much I wanted to do a little giving back.

Barclay Arrival World MC 10K, Citi AAdvantage 16K, Chase Sapphire Preferred 15K, AMEX Gold Delta Skymiles 16K, Venture One 5K, Discover Direct Rewards (Cap 1) $300, Discover Direct Rewards (Cap 1) $500

Scores: EX 764 EQ 750 TU 809 MyFico 739 Last App 11/13

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+