Discover Card current interest charge

[DaveInAZ]

Well, that's the best way I can think of phrasing it. On my Feb. 20 statement I had a balance of $3200, primarily from a BT. Discover says on BT terms that when you have a BT balance your new purchases are charged interest as of the posting date. I have now paid off the balance and have a $19.xx credit balance from pushing a payment to them through bill pay. My question is: Now that I have a credit balance will purchases made before my 3/20 statement now be interest free, or do I need to wait for the 3/20 statement to post w/credit balance and purchases after that will be interest free with PIF payments? With the current 5% rewards on gas I'd like to use the card, but if I'm going to be charged my 14.xx% interest I'll use my BoA Cash Rewards 3% gas card instead.

[SarahJo]

Charged interest as of posting date as in how a LOC works?  Or the statment post date?  I'll just share what I've experienced with my Wayfair card:  Purchases over $400 (we're remodeling so I've done this several times now) qualify for a 0% finance rate.  All other purchases that are not included in that order subsequently (i.e. doorknob, chair) are charged interest if a balance carries through the following statement period.   My point being, they clearly seperate the promotion purchase (as in possibly a BT) and the misc. items not included in that order (as in day to day charges on your CC that do not relate to the BT).  So I would say you are fine, because if Comenity can seperate when I pay off an entire balance relating to the promotional purchase and then all other charges (paying your balance in full) I would surely hope that Discover can...buuuuuuut YMMV, maybe just bite the bullet and call to confirm. 

[Anonymous]

You will be charged interest

[DaveInAZ]

Thanks, that was my guess, I need to wait for the statement with $0 or credit balance to get my no interest grace period back for new purchases. Oh well, only 10 more days

[imaximous]

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@DaveInAZwrote:
Thanks, that was my guess, I need to wait for the statement with $0 or credit balance to get my no interest grace period back for new purchases. Oh well, only 10 more days

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That doesn't seem right. When you have a balance on a promotional rate, any payments that you send in are applied to the balance with the promo rate that expires first or higher APR. In other words, if you have 0% promo with a $1k balance, your minimum payment on that may be $30, for instance. If you make a purchase, make sure you send in enough to cover that full purchase plus your minimum on the promotional balance. So if you spent $100, send in $100 plus at least $30 to cover the promo balance. IF you do that, you won't be penalized with that purchase APR. 

[DaveInAZ]

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@imaximouswrote:

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@DaveInAZwrote:
Thanks, that was my guess, I need to wait for the statement with $0 or credit balance to get my no interest grace period back for new purchases. Oh well, only 10 more days

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That doesn't seem right. When you have a balance on a promotional rate, any payments that you send in are applied to the balance with the promo rate that expires first or higher APR. In other words, if you have 0% promo with a $1k balance, your minimum payment on that may be $30, for instance. If you make a purchase, make sure you send in enough to cover that full purchase plus your minimum on the promotional balance. So if you spent $100, send in $100 plus at least $30 to cover the promo balance. IF you do that, you won't be penalized with that purchase APR. 

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Well, you are correct in that, for some credit cards. Capital One is one of the more customer friendly CCs in that if you're carrying a BT promo balance and make a new purchase that amount is interest free for one statement cycle. Your next payment due has what they call an "interest saver" payment that tells you exactly how much you need to pay to avoid interest on new purchase(s) plus the minimum payment on your promo balance. Others may also do it this way, but the Discover BT offer specifically tells you that any new purchases made while you have a BT promo balance will not  have an interest free grace period, interest accrues from the posting date. 

And my questions was that now I have paid off everything, BT balance + new purchases and actually have a small credit balance can I now make new purchases and have a no interest grace period, or do I need to wait for a statement to report that? It appears the answer is probably not, and to be safe I won't use the card until I get my $0 balance/small credit balance statement on the 20th. Most credit cards require you to have a $0 balance statement cycle to have a no interest grace period on new purchases, whether your previous balance was a promo rate or standard rate for previous carried over purchases.

[imaximous]

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@DaveInAZwrote:

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@imaximous

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Well, you are correct in that, for some credit cards. Capital One is one of the more customer friendly CCs in that if you're carrying a BT promo balance and make a new purchase that amount is interest free for one statement cycle. Your next payment due has what they call an "interest saver" payment that tells you exactly how much you need to pay to avoid interest on new purchase(s) plus the minimum payment on your promo balance. Others may also do it this way, but the Discover BT offer specifically tells you that any new purchases made while you have a BT promo balance will not  have an interest free grace period, interest accrues from the posting date. 

And my questions was that now I have paid off everything, BT balance + new purchases and actually have a small credit balance can I now make new purchases and have a no interest grace period, or do I need to wait for a statement to report that? It appears the answer is probably not, and to be safe I won't use the card until I get my $0 balance/small credit balance statement on the 20th. Most credit cards require you to have a $0 balance statement cycle to have a no interest grace period on new purchases, whether your previous balance was a promo rate or standard rate for previous carried over purchases.

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I'm glad to have come across this thread. I have some Discover BT promo checks sitting on my desk, and I read the BT terms. They do charge you interest on the new purchases UNLESS you pay off the entire balance (new purchase and BT) by the first due date. However, that beats the entire purpose of someone's trying to take advantage of the promo BT for the longest term.

I think you're right by playing it safe, but I still wonder if it'd apply to you because you're in a position to pay off everything by the next due date. I wouldn't risk it, but I'm really curious if my assumption is correct.

[DaveInAZ]

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@imaximouswrote:

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I'm glad to have come across this thread. I have some Discover BT promo checks sitting on my desk, and I read the BT terms. They do charge you interest on the new purchases UNLESS you pay off the entire balance (new purchase and BT) by the first due date. However, that beats the entire purpose of someone's trying to take advantage of the promo BT for the longest term.

I think you're right by playing it safe, but I still wonder if it'd apply to you because you're in a position to pay off everything by the next due date. I wouldn't risk it, but I'm really curious if my assumption is correct.

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Well, I love Discover BT offers for short term funding for opportunities, just don't use the card for purchases while you have a BT promo balance. And that usually works for me, I pretty much only charge on it when the 5% quarterly spend bonus works for me, or a 5% Discover Deals purchase, 1% rewards don't cut it. This year the Jan.-March 5% Gas and the April-June 5% groceries work well for me, the July-Sept. & Oct.-Dec. Amazon & Wholesale clubs not very much.

For a long time I've had 0% 12 month 3% Fee and a 4.99% 15 month 0% Fee BTs offers. I've taken the 4.99% BT offer a couple times, 4.99% annual rate divided by 12 months works out to under 1/2% actual interest cost per month**, so for funds needed for less that 6 months that's the better deal. I took a $4500 BT in early Feb - I had an offer for a $200 bonus for depositing $10k into a new Cap One 360 Money Market account by 2/16, and was a few thousand short of having the $10k available then. I've now repaid that BT in full and interest cost was under 20 bucks, so a pretty good return. Oh, and I also bought a $1100 Sony TV through Discover Deals. Earned $55 in rewards, and BT'd that balance to a new Amex Everyday card with 0% for 15 months.

** 4.99% interest on $5k is $250 per year, but only $20.83 per month, actual cost of .04%.

[imaximous]

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@DaveInAZwrote:

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@imaximouswrote:

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I'm glad to have come across this thread. I have some Discover BT promo checks sitting on my desk, and I read the BT terms. They do charge you interest on the new purchases UNLESS you pay off the entire balance (new purchase and BT) by the first due date. However, that beats the entire purpose of someone's trying to take advantage of the promo BT for the longest term.

I think you're right by playing it safe, but I still wonder if it'd apply to you because you're in a position to pay off everything by the next due date. I wouldn't risk it, but I'm really curious if my assumption is correct.

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Well, I love Discover BT offers for short term funding for opportunities, just don't use the card for purchases while you have a BT promo balance. And that usually works for me, I pretty much only charge on it when the 5% quarterly spend bonus works for me, or a 5% Discover Deals purchase, 1% rewards don't cut it. This year the Jan.-March 5% Gas and the April-June 5% groceries work well for me, the July-Sept. & Oct.-Dec. Amazon & Wholesale clubs not very much.

For a long time I've had 0% 12 month 3% Fee and a 4.99% 15 month 0% Fee BTs offers. I've taken the 4.99% BT offer a couple times, 4.99% annual rate divided by 12 months works out to under 1/2% actual interest cost per month**, so for funds needed for less that 6 months that's the better deal. I took a $4500 BT in early Feb - I had an offer for a $200 bonus for depositing $10k into a new Cap One 360 Money Market account by 2/16, and was a few thousand short of having the $10k available then. I've now repaid that BT in full and interest cost was under 20 bucks, so a pretty good return. Oh, and I also bought a $1100 Sony TV through Discover Deals. Earned $55 in rewards, and BT'd that balance to a new Amex Everyday card with 0% for 15 months.

** 4.99% interest on $5k is $250 per year, but only $20.83 per month, actual cost of .04%.

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That's a pretty smart use of BT offers. I never thought of it like that. I get a ton of unsolicited checks with BT promos from my cards and always run them through the shredder. The best ones I've got were from Capital One with 2% BT fee and 0% for 12 months or even 18 months, I think.

My Discover only sees 5% cashback charges, random promos for extra cashback or discounts at some restaurants or retail stores. Aside from that, I have no real use for it. But you just gave me some ideas for other purposes. Good thinking!