topic Re: Freedom 0% APR in Credit Cards

Freedom 0% APR

vanillabean — Sun, 25 Jan 2015 03:55:55 GMT

Is there any reason why you would want to pay more than the minimum when the Chase Freedom starts out with 15 months of 0% APR? Does Chase care?

Re: Freedom 0% APR

kdm31091 — Sun, 25 Jan 2015 03:59:25 GMT

Well, if you have a large purchase you want to make and can't PIF, it makes sense to take advantage of the 0% APR.

Do I think you should max out the card and pay the minimum for all 15 months? Probably not, if nothing else your util will be high. Chase shouldn't in theory care, because that's why they offer the 0%, but at the same time, you'd be starting off as a "risky" customer with this behavior.

Re: Freedom 0% APR

Anonymous — Sun, 25 Jan 2015 04:01:14 GMT

@Anonymous-own-fico wrote:
Is there any reason why you would want to pay more than the minimum when the Chase Freedom starts out with 15 months of 0% APR? Does Chase care?

Yes.

To put a dent in the balance if any.

Re: Freedom 0% APR

Imperfectfuture — Sun, 25 Jan 2015 04:24:14 GMT

@Anonymous-own-fico wrote:
Is there any reason why you would want to pay more than the minimum when the Chase Freedom starts out with 15 months of 0% APR? Does Chase care?

I have 15 month 0% on Amex. I also use it for other purchase. I planned on paying it down in 6 months, besides the payments for other purchases, then can add some other goody, and pay way more than the minimum. They gave me a decent starting limit though, so the card never got over 16% util. I think they like to see bigger payments, but as long as you aren't maxing the card out, whatever should be fine.

If you are taking advantage of the rotating categories, you will probably be paying more than the minimum anyways.

Re: Freedom 0% APR

vanillabean — Sun, 25 Jan 2015 16:32:12 GMT

So you probably can't go for simply 3-5x the minimum for the billing cycle in question. You would likely take the accumulated statement balance and apply the 3-5x to the standard minimum of say 2%. Does something like that make everyone happy?

Re: Freedom 0% APR

Anonymous — Sun, 25 Jan 2015 16:40:19 GMT

There are two ways to carry balances on purchases.

One way is to make a large single purchase and pay it back over time.

The other is small, everyday purchases and carry a balance on those.

If you are a lender, Which looks riskier?

Re: Freedom 0% APR

vanillabean — Sun, 25 Jan 2015 17:35:07 GMT

I'm at a complete loss here. Which one is it?

Re: Freedom 0% APR

Anonymous — Sun, 25 Jan 2015 17:38:42 GMT

One large purchase not paid in full but in installments if you will can seem less risky than many small everyday purchases being carried over. Repayment ability may be called into question.

Re: Freedom 0% APR

kdm31091 — Sun, 25 Jan 2015 17:39:19 GMT

I would agree one large purchase that you steadily pay down is better than several small balances

Re: Freedom 0% APR

Tszone — Sun, 25 Jan 2015 17:54:08 GMT

I just made a big purchase with my Freedom card yesterday, but also use it for groceries. Made the purchase right afer 1st statement cut. I plan on paying my regular spending and adding additional to pay down the big purchase every month. I also was approved for the CSP this month, but have not received the card yet.

Re: Freedom 0% APR

Anonymous — Sun, 25 Jan 2015 17:56:07 GMT

The guy who gets his card with 15 months 0 percent, buys new living room furniture and uses the 0 percent to pay it down is far less risky than the guy carrying a balance because he cant pay off his 5 dollar charges for downloads on the playstation and 17 dollar 7 eleven purchase. At least that would be my risk analysis. Maybe guy number 2 will pay more down in the months when redbull is on sale tho.

Re: Freedom 0% APR

Anonymous — Sun, 25 Jan 2015 17:57:07 GMT

Lol. Exactly my point.

Re: Freedom 0% APR

Imperfectfuture — Sun, 25 Jan 2015 18:00:41 GMT

@Tszone wrote:
I just made a big purchase with my Freedom card yesterday, but also use it for groceries. Made the purchase right afer 1st statement cut. I plan on paying my regular spending and adding additional to pay down the big purchase every month. I also was approved for the CSP this month, but have not received the card yet.

+1, what I did with Amex, and can do later for another purchase, while setting that extra in savings.

Re: Freedom 0% APR

vanillabean — Sun, 25 Jan 2015 18:42:42 GMT

@Anonymous wrote:
One large purchase not paid in full but in installments if you will can seem less risky than many small everyday purchases being carried over. Repayment ability may be called into question.

Maybe. Do the two pose different thresholds in absolute dollar amounts? Will the credit card company shut you down at $2000 for accumulated coffees, while allowing a single purchase of $5000?

Re: Freedom 0% APR

Chris679 — Sun, 25 Jan 2015 19:16:27 GMT

They probably aren't going to shut either guy down because they are making money off both hypothetical guys. Those of us around here though are often pushing the limits of what we can get as far as CLI, rewards, lower APR, etc so there is an incentive to try to look as responsible as you can. I have taken advantage of 0% APR on almost every card I've had and try to pay 10% of the balance. I did however open a card once and max it out right away then pay the minimum for the entire 15 months with no issues, even got an auto CLI. Who was it you ask? It was Chase (gasp)

Re: Freedom 0% APR

Anonymous — Sun, 25 Jan 2015 19:16:28 GMT

Paying the minimun on a large purchase, wont help you pay it all in 15 months.

Re: Freedom 0% APR

Chris679 — Sun, 25 Jan 2015 19:19:31 GMT

@Anonymous wrote:
Paying the minimun on a large purchase, wont help you pay it all in 15 months.

As a matter of fact it will. It will lower the balance by 15% or so.

Re: Freedom 0% APR

cottoncrown — Sun, 25 Jan 2015 22:33:43 GMT

They love it that's how they make money. They want you to buy a new livng room set for the 0% and then get lured in to using it for groceries for the 5%. Next thing you know you're using the card for everything and are in $5k debt paying it back at 22% and relying on your card for everyday expenses. Another sucker paying hundreds of dollars interest just to finance a living room set they didn't need in the first place.

Re: Freedom 0% APR

Imperfectfuture — Sun, 25 Jan 2015 22:38:20 GMT

@he's back

But, but, I don't have 22% interest cards (well, maybe one, but if they don't lower the apr, it goes boom).