topic Direct Deposit Balance Transfers in Credit Cards

Direct Deposit Balance Transfers

Anonymous — Wed, 27 Nov 2019 21:32:29 GMT

Looks like the balance transfer card for Discover is 0% interest for 18 months with a 3% transfer. How does that even work? Do you send them a statement from the credit card you've used the funds for?

Or are you essentially getting an 0% 18 month personal loan for a 3% fee?

I can't even wrap my head around that, it boggles the mind.

Re: Direct Deposit Balance Transfers

Anonymous — Wed, 27 Nov 2019 21:36:37 GMT

It is essentially a 3% fee 0% APR short term personal loan.

Re: Direct Deposit Balance Transfers

K-in-Boston — Wed, 27 Nov 2019 21:42:11 GMT

Yep, that's exactly what it is. An 18 month loan at 0% with a 3% fee up front. (Which is exceptional, I might add. I usually only see 12 months at 0% and 18 months at 4.99% from them.) You can use it for whatever you want. The "catch" is that if you don't pay it off or transfer it elsewhere before the promo period ends, you'll begin to accrue interest at a high APR.

Re: Direct Deposit Balance Transfers

Anonymous — Wed, 27 Nov 2019 21:52:49 GMT

@K-in-Boston wrote:
Yep, that's exactly what it is. An 18 month loan at 0% with a 3% fee up front.

Basically a cash advance with no catches beyond the regular not paying it off pitfall.

That sounds literally insane. I know it's not, but it sure does feel like it.

Re: Direct Deposit Balance Transfers

K-in-Boston — Wed, 27 Nov 2019 22:04:55 GMT

They're great for us as consumers, but for the credit card issuers it's also profitable.

If you have $5000 sitting on Amex, Discover's not making anything from that. If you pay a 3% fee, that entices you to pay them a $150 fee to move it over to them. Consider that they likely have hundreds of thousands of people doing so each year and that adds up to a lot of money.

A majority of people will either not pay the entire balance off by the end of the promotional period or transfer it to another card (many people are not in a position to do so), so there's interest to be made from many consumers at a high APR on the remaining balance.

Finally, if you did not pay your previous statement balance in full including any balance transfers you have lost your grace period on new purchases. So any new purchases will start accruing interest from day one.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 00:46:41 GMT

If you want your mind boggled even more, how about a 0% for 12 months and no transaction fee, up to your total credit line, direct deposited into your checking account. That wasn't uncommon in 2007 and 2008. I've done it several times. As a matter of fact you could call a CSR for something totally unrelated, and the CSR would say, anything else I can help you with, how about a 0% APR, no transaction fee, for 12 months, direct deposit into your checking account. We can do it right over the phone. BoA was great for that line. I've done 35.5K on BoA twice, Citi for 31K once or twice, and another card.

But then the financial crisis came, the CARD act became law, and that's all she wrote.

Re: Direct Deposit Balance Transfers

K-in-Boston — Thu, 28 Nov 2019 01:08:46 GMT

A few notable lenders still make those $0 fee and 0% APR offers from time to time. Navy Federal Credit Union and Comenity (on V/MC cards) come immediately to mind. Also available with new accounts on BankAmericard, EveryDay, and Slate.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 01:20:47 GMT

@K-in-Boston wrote:
A few notable lenders still make those $0 fee and 0% APR offers from time to time. Navy Federal Credit Union and Comenity (on V/MC cards) come immediately to mind. Also available with new accounts on BankAmericard, EveryDay, and Slate.

I'm hoping we see more of them again with existing cards. But I'll never do what I did back then. Have them going on 2 or 3 cards at once, and have a total utilization of 70-80% and risk AA. I was lucky that didn't happen. But I could earn 5% on that money, I can get only 2.3% now.

Re: Direct Deposit Balance Transfers

redheadtempe36 — Thu, 28 Nov 2019 11:01:38 GMT

Wells Fargo offered something similar to me once. 15 months at 0% with a 4% fee. I could have the money just transferred to my checking account.

Re: Direct Deposit Balance Transfers

AverageJoesCredit — Thu, 28 Nov 2019 14:00:55 GMT

This is my favorite method of Bt. Straight to your account, YOU can then pay off your lender you want to bt away from as if it were a regular payment. No need to wait a week or more for them to send check out to a lender. Comenity is well known for 0% apr $0 fee, though that is unobtainable for me

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 16:59:49 GMT

@K-in-Boston wrote:
A few notable lenders still make those $0 fee and 0% APR offers from time to time. Navy Federal Credit Union and Comenity (on V/MC cards) come immediately to mind. Also available with new accounts on BankAmericard, EveryDay, and Slate.

Yes but these can't be direct deposited, they have to be used to pay creditors. I asked NFCU about BT checks when they had the $0/0% last year and they said they can send me checks but they would be at full APR. I read that Comenity doesn't allow BT to checking either.

I will say that I am having a tough time not spending money right now and I had actually ordered a Note 10+ from Amazon for $899 with 20% cash back on my Amazon Store Card and I was going to take a BT from Disco for $965 at 3% fee and 0% for 9 months to save a bundle on a Note 10+ ($801 for 256GB model after taxes, Disco BT fee, and Amazon Store Card cash back) but I just can't justify it right now.

It is definitely really nice to have BT offers available for purchases like that though that are too much to PIF but are rather lucrative with a high APR card.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 18:56:53 GMT

Discover still offers up to your total CL for BT's. Unfortunately doing that would put people at high utilization, for what would be a small benefit.

If i could get the fee free offer again I'd be tempted to borrow 50% of my Discover CL for some small renovation projects. I certainly don't like the rates for Personal Loans, and even at the lowest I've seen 8%. So I'd save a ton of cash by doing a BT Loan instead.

However, only having 12-18 months to pay back $10-15K would be the kicker. As I don't have an extra $700 a month to throw away. Especially since My Company is letting a lot of us go in February...

Re: Direct Deposit Balance Transfers

Matt9543 — Thu, 28 Nov 2019 19:16:58 GMT

I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 19:22:48 GMT

@Matt9543 wrote:
I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.

Citi has had it for ages.

I think it's just the no fee ones that the lenders try to fence off from direct deposit. I mean if you take a no fee BT and stick it in high yield savings, you're earning more money on their money than you would earn in rewards while giving them swipe fees using the card.

Re: Direct Deposit Balance Transfers

Matt9543 — Thu, 28 Nov 2019 19:51:00 GMT

@Anonymous wrote:
@Matt9543 wrote:
I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.
Citi has had it for ages.

I think it's just the no fee ones that the lenders try to fence off from direct deposit. I mean if you take a no fee BT and stick it in high yield savings, you're earning more money on their money than you would earn in rewards while giving them swipe fees using the card.

I was just going through my accounts and only really noticed the option on Discover and Citi. But that does make sense as well. It may come in handy once in a while.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 20:07:49 GMT

@Matt9543 wrote:

@Anonymous wrote:
@Matt9543 wrote:
I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.
Citi has had it for ages.

I think it's just the no fee ones that the lenders try to fence off from direct deposit. I mean if you take a no fee BT and stick it in high yield savings, you're earning more money on their money than you would earn in rewards while giving them swipe fees using the card.
I was just going through my accounts and only really noticed the option on Discover and Citi. But that does make sense as well. It may come in handy once in a while.

Lenders like BTs because a lot of people don't pay them off before they expire or they use their card for regular purchases and get charged interest right away plus those fees are guaranteed income for them. It makes sense to make them as easy to use as possible. I never did a BT until I got my NFCU Plat last year and honestly that process was annoying filling out account numbers and waiting for checks to go out and then waiting for balances to go down, taking a double utilization penalty in the interim. When I did my BT to checking with Disco earlier this year, the money was in my account the next day and my balances were showing paid off the day after.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 20:19:22 GMT

@Anonymous wrote:
@Matt9543 wrote:
I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.
Citi has had it for ages.

I think it's just the no fee ones that the lenders try to fence off from direct deposit. I mean if you take a no fee BT and stick it in high yield savings, you're earning more money on their money than you would earn in rewards while giving them swipe fees using the card.

I think the CARD act has a direct or indirect effect on whether they're going to offer no fee with the 0% APR with direct deposit. It might be seen as reckless, and the government might make it difficult for them to do those. Hopefully they didn't make them illegal.

Re: Direct Deposit Balance Transfers

AverageJoesCredit — Thu, 28 Nov 2019 20:31:17 GMT

I read one post where a poster was being offered an Amex loan up to 35 or 40k at 0% ! I even asked if he/she was sure and they said yes. I think the op was a very high spender with Amex so im sure certain people may be offered those desls as kinda reward for their spend/relationship with said lender.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 21:37:52 GMT

@Anonymous wrote:
@Anonymous wrote:
@Matt9543 wrote:
I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.
Citi has had it for ages.

I think it's just the no fee ones that the lenders try to fence off from direct deposit. I mean if you take a no fee BT and stick it in high yield savings, you're earning more money on their money than you would earn in rewards while giving them swipe fees using the card.
I think the CARD act has a direct or indirect effect on whether they're going to offer no fee with the 0% APR with direct deposit. It might be seen as reckless, and the government might make it difficult for them to do those. Hopefully they didn't make them illegal.

There is nothing reckless about giving a no interest loan to a consumer as long as you have reasonable belief that they have the ability to repay that loan. I haven't read the CARD Act but I highly doubt it states "must charge consumers interest" in any capacity.

Re: Direct Deposit Balance Transfers

Anonymous — Thu, 28 Nov 2019 22:40:52 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Matt9543 wrote:
I have a BT offer for Citi and they show that I can deposit it to my checking account, or pay off a loan or multiple other options, so this option is becoming more available across lenders.
Citi has had it for ages.

I think it's just the no fee ones that the lenders try to fence off from direct deposit. I mean if you take a no fee BT and stick it in high yield savings, you're earning more money on their money than you would earn in rewards while giving them swipe fees using the card.
I think the CARD act has a direct or indirect effect on whether they're going to offer no fee with the 0% APR with direct deposit. It might be seen as reckless, and the government might make it difficult for them to do those. Hopefully they didn't make them illegal.
There is nothing reckless about giving a no interest loan to a consumer as long as you have reasonable belief that they have the ability to repay that loan. I haven't read the CARD Act but I highly doubt it states "must charge consumers interest" in any capacity.

I agree. But the CARD act architects put in things to protect consumers, but some of them restrict banks on how they can do business. And maybe it makes it more difficult to do 0% direct deposit transfers. Not sure.