Chase charges full APR fee on the balance transfer fee -- go figure?

[Anonymous]

I recently took advantage of my 0% balance transfer on my Chase credit card which I haven't used in a long time. I noted that on the transfer fee which was 3% it is now listed on my satement as charging me 8.99 interest on it. That means that for the duration of the loan I will be charged 8.99 on a fee (doesn't matter how small it was - it's the principle of the thing) that I already got charged for.  I never would have agreed to the balance transfer if I knew they were going to pull a stunt like that. Anyone else noticed these sneaky kind of charges being placed on accounts?

[ocheosa]

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@Anonymous wrote:
I recently took advantage of my 0% balance transfer on my Chase credit card which I haven't used in a long time. I noted that on the transfer fee which was 3% it is now listed on my satement as charging me 8.99 interest on it. That means that for the duration of the loan I will be charged 8.99 on a fee (doesn't matter how small it was - it's the principle of the thing) that I already got charged for.  I never would have agreed to the balance transfer if I knew they were going to pull a stunt like that. Anyone else noticed these sneaky kind of charges being placed on accounts?

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I've used my chase disney twice for balance transfers and this has never happened to me. My transfers are also capped at $50.  Did you have a balance on that card prior to the transfer? Or did you receive new terms? If not give them a call it may have just been an error on their part.

[hdporter]

The 0% bt option on a Chase card is valid only for a limited period of time.  On new cards, it's often valid for bt throughout the first year of membrship.  Specifics can vary, however.  Additional 0% bt offers may become available from time to time, as offered to you online and by mail.

Details as to how long the rate is valid is very specific and clear.  From what you write, you either no longer had a 0% offer in place on the account or didn't access it with the proper bt checks.

If you hold evidence that you do have access to a 0% rate, you should call Chase to get them to reset the rate on the balance.  In my experience, Chase has been very reliable when taking advantage of their 0% rate offers.

[Watchmann]

The transfer fee is assumed to be an interest charge, so for the first month the fee as a percentage of the BT can make for a seemingly high APR, especially if it is calculated over a low number of days in the cycle, but it really is a meaningless number.   It's not anything sneaky or subversive, it is just is how the math works out for the first month.  Next month you'll see the APR as 0% and your balance will be the BT + the 3% fee.

Example: say you transfer $6,000 with a 3% fee ($180).  But say the transfer was done 2/3 into the cycle, so the average daily balance for the month would be $6,000/3 = $2,000.  The BT fee of $180 as a percent of the $2,000 average balance is 9%, and this would be the basis to calculate the APR for the month.  But it is a meaningless number.

Message Edited by Watchmann on 06-21-2009 01:41 PM

[Anonymous]

Watchman is correct on this.Ii've seen the exact same thng when I did BTs. I wanted to answer this last night, but didn't quite know how to explain it. Watchman, you did an excellent job!

[Anonymous]

This is the "latest thing," if you will.  I noticed that I have several BT offers on my RBS card, but if you read the fine print, you will note that the transfer fee will be considered a "purchase" and will accrue interest at the purchase APR.

My guess is that if you go back and read the fine print on your Chase offer, you will find similar verbiage. CCCs are getting very clever in finding ways to beat a few extra dimes out of the bushes. I do believe this is one of the latest ideas. They are counting on people either not reading the fine print, or just ASSUMING that the newest offer will work the same way the last offer did.

Let us know what you find after you read the fine print on this . . .

[Anonymous]

Thanks for all the feedback - the bottom on all this is as follows:

Having never utilized these 0% offers I was receiving for years, I'm newbie at the financial jargon and charges they place on your statements.

I have 0% apr on the cash transfer but they charged 3% for it.

The fee apparently they have to list it separately on the interest line on the statement for disclosure reasons...hmm!

But the good news is it's there for the first statement only. Watchman, thank you, you put it succinctly in a nutshell! I almost freaked when I thought they were going to keep charging for the 3% fee which is already a charge.

Message Edited by Sully1229 on 06-22-2009 12:57 PM

[Anonymous]

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@Anonymous wrote:

Thanks for all the feedback - the bottom on all this is as follows:

Having never utilized these 0% offers I was receiving for years, I'm newbie at the financial jargon and charges they place on your statements.

I have 0% apr on the cash transfer but they charged 3% for it.

The fee apparently they have to list it separately on the interest line on the statement for disclosure reasons...hmm!

But the good news is it's there for the first statement only. Watchman, thank you, you put it succinctly in a nutshell! I almost freaked when I thought they were going to keep charging for the 3% fee which is already a charge.

Message Edited by Sully1229 on 06-22-2009 12:57 PM

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I assume you got this information by speaking to Chase?  If so, good!  It is a bit scary when you see that transfer fee show up on the first statement. Still, I would keep an eye on this on your next statement.

Also, be VERY careful with BTs these days. Some CCCs (RBS for one) DO charge the purchase APR rate on the BT fee. This is a new gimmick and a way for them to make additional money, so always read all the fine print before you do anything with a card!  :-)

[GregB]

Over the years I have done many, many BT. These are usually at 0% but some have been at low interest rates.

I HAVE had some companies charge interest on the BT fee until the very end. This has normally been the Purchase Interest Rate but I did have one company charge the Cash Advance Rate.

I have gotten rid of any companies that charge ANY interest on the BT fee and have not had a fee recently from BofA, Chase, Discover, or Capital One (Prime Cards).

I would just read the agreement carefully and call first if you have a question.

[Anonymous]

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@GregB wrote:

Over the years I have done many, many BT. These are usually at 0% but some have been at low interest rates.

I HAVE had some companies charge interest on the BT fee until the very end. This has normally been the Purchase Interest Rate but I did have one company charge the Cash Advance Rate.

I have gotten rid of any companies that charge ANY interest on the BT fee and have not had a fee recently from BofA, Chase, Discover, or Capital One (Prime Cards).

I would just read the agreement carefully and call first if you have a question.

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NO BT fee at all? Wow. That's sweet. BofA just increased theirs to 4% from 3%. I've never had any charge me the purchase APR on the BT fee, either, but I did notice that this is the case with at least RBS. I've never done a BT through Cap One, but I have used BofA, Chase, Discover, US Bank, Citi and even RBS. It has only been recently that I noticed that RBS has changed its policy to charge interest on the BT fee as if it were a purchase. I can only assume that at least some others either already are or will do so in the future.

You're are correct ---- nothing beats reading the fine print BEFORE you act. Calling customer service is fine, too, but it's not binding on anyone, so I'd be careful acting on any information I received over the phone, especially if it seems to contradict the printed word.