BTs and Grace Periods?

[pinkandgrey]

Citi has been hounding me with BT offers, which got me thinking. I'm surprisingly ignorant when it comes to the terms of things like this. If I were to accept a 0% BT offer, would any new purchases on the card lose the grace period? Meaning, if I made a purchase, would that purchase begin accruing interest as soon as it posts? So I would be paying interest even if I PIF* before the due date? I've always wanted clarification on this but it was never really an issue anyway. 

*PIF for any NEW purchases, but not the entire BT obviously 

Thanks! 

[Remedios]

Same lenders like Capital One allow new purchases when one has a BT on their cards, but entire amount of new purchase (plus whatever you are paying on BT) must be paid when statement cuts. 

Others do not, and I believe Citi does not. Any new charge would start incurring interest after it posts.  

[Taurus22]

From personal experience....I've done BT's with both Discover and BoA from targetted offers.

When you do a 0% BT to a card, pretty much expect that you shouldn't use it for further purchases. Otherwise, when the next statement cuts it will be acruing interest on both the purchases and BT amounts. It effectively negates the 0% BT rate. So, you would be shooting yourself in the foot if you're not ready to pay the BT in full that following month.

[pinkandgrey]

Okay, that kind of brings up another thing I'm wondering: so does the interest on new purchases start accruing on the date that the purchase posts? Or on the statement cut date? 

[Brian_Earl_Spilner]

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@pinkandgrey wrote:

Okay, that kind of brings up another thing I'm wondering: so does the interest on new purchases start accruing on the date that the purchase posts? Or on the statement cut date? 

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Depends on the lender. Some start charging immediately as there is no longer a grace period once you're using a promo rate.

[Taurus22]

@pinkandgrey   If you're referring to the BT balance, that I'm unsure of.  I know the purchase obviously starts acruing as it normally would from the date posted.  I've never purchased on top of any of my 0% BT offers.

Before I activated the BT offers and moved the balances, I had to make multiple calls to Discover and BoA both to ensure I understood the parameters clearly. Once it was explained to me, I made the conscious decision to just ride the BT until it was paid off before adding purchases.

Maybe someone else has experience with that aspect and can clarify for you. It seems like the BT would start acruing at the same time the purchase hit the card, but I'll let someone else verify that for you.

[KatSoDak]

Why would the TOS change on the grace period on new purchases?  If you carry a balance from month to month on a purchase instead of PIF, the next purchase won't accrue interest until your next statement date. 

I don't see how that could change just because your balance is due to a BT.

[MJ-san]

Most lenders lose the grace period when you take a BT - ONLY do BTs with a card from them that you are using for cash back if it's new and has a promo 0% rate. After that intro period, you have to pick - BTs or cash back. In my case that's Citi (excluding Sears), Chase, BoA, Disco - once I take a BT offer (and I only do that when the fee is <3%, and term > 12 mos... effectively making that a 3% (or less) loan. I then sock drawer the card after putting the reminder notification in my calendar to remember to pay off. 

Barclays, Cap One, and Citi/Sears are the rare ones that let you pay new purchases without incurring interest while you have a promo BT. Taco One and Barclays say on the statement "minimum payment to avoid interest" -- a very handy feature. Citi/Sears you have to look at the last statement and make sure you pay the "new purchases" amount to avoid interest.

Hope that helps!

[longtimelurker]

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@KatSoDak wrote:

Why would the TOS change on the grace period on new purchases?  If you carry a balance from month to month on a purchase instead of PIF, the next purchase won't accrue interest until your next statement date. 

I don't see how that could change just because your balance is due to a BT.

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The TOS don't change.   Most of them refer to a grace period applying if this (and previous) statement has been paid in full.   A BT balance means it wasn't paid in full.   The other lenders that do preserve a grace period explicitly allow it

[NRB525]

The Citi DC would start interest, on the specific new charges, separate from the BT identified balance.  You can get ahead of the interest by making sure you pay the minimum statement payment soon after the statement cuts, then paying new charges plus a bit more, weekly. This is because your minimum payment goes to the lowest APR first, then additional payments in the month are applied to higher APR items.  Paying the minimum payment ( often $35 or less ) gets ahead of the maths for the month. 

However if one has a 19% APR, we need to be really quick about the extra payments, as daily interest adds up rather fast. A 12% APR on a Double Cash stilll gets you a bit more of the 1% on the purchase step. 

One area I'm not as familiar with is whether the DC needs to see the new purchases on a statement balance, before you get the 1% for payment of those amounts. I've not had a DC, but there was a discussion a few years ago that makes me wonder if the second 1% is given on Pay Daily situations.  

So it is possible to have a BT on a card, use it for purchases and not have significant interest costs, but it's easier to keep the BT on a separate card.  

With Discover, you can ask for a 12-month 0% purchases APR promo every 18 months, and during that 12-month promo period it's cake to have the BT and also spend on their 5% categories.