Easy/Stupid Question - Sorry

[Anonymous]

I can't remember or find why. But, why aren't you suppose to use a card with 0% a BT on it for regular periodic purchases? Can someone help me understand this...I use to know and now it simply escapes me...thanks in advance!

[Anonymous]

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Pj1369 wrote:
I can't remember or find why. But, why aren't you suppose to use a card with 0% a BT on it for regular periodic purchases? Can someone help me understand this...I use to know and now it simply escapes me...thanks in advance!

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Because payments are applied to the lowest APR first.  So that means they will be applied to the BT balance, and your $7 charge for Value Meal #1 will sit there month after month, accruing interest, because you won't be able to touch it until the BT is paid off completely.

In the end, even though you got a good deal on the BT, you paid an awful lot for that cheeseburger!  This is how CCCs make their money on 0% BT offers, and it's what they expect you not to know or think about, so prove them wrong and don't do it!

[Anonymous]

Some cards have promos 0 percent for BT's AND purchases and then it's ok to purchase too.

Some cards have promo 0 percent for BT's but regular APR for purchases, and lower APR's get paid first leaving your purchases to be unpaid each month generating interest.

BAD BAD BAD

[haulingthescoreup]

And the other way that CCC's know that they will make money off of a fair amount of us: we don't discipline ourselves to pay the cards off before the 0% expires, or to save enough money elsewhere to pay it off in time.

DH was guilty of both: he put a car repair for a couple hundred bucks on the BT card (ka-ching, ka-ching), and he didn't get it paid off in time. Not the end of the world, he has a 9.99% rate, but between the two, plus the original BT fee, BofA is doing just fine off his business!

[Anonymous]

Ohhh yeah - thanks all!!

[Anonymous]

My HSBC Best Buy card will actually allow you to apply payments to different card plans. For example you could call them and tell them to apply the payment towards a higher interest purchase before the lower interest purchase.

But that's the only card I've ever seen that on.

[Anonymous]

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woopah wrote:
My HSBC Best Buy card will actually allow you to apply payments to different card plans. For example you could call them and tell them to apply the payment towards a higher interest purchase before the lower interest purchase.

But that's the only card I've ever seen that on.

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GEMB CareCredit lets you do that, too.

[Anonymous]

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@haulingthescoreup wrote:
And the other way that CCC's know that they will make money off of a fair amount of us: we don't discipline ourselves to pay the cards off before the 0% expires, or to save enough money elsewhere to pay it off in time.

DH was guilty of both: he put a car repair for a couple hundred bucks on the BT card (ka-ching, ka-ching), and he didn't get it paid off in time. Not the end of the world, he has a 9.99% rate, but between the two, plus the original BT fee, BofA is doing just fine off his business!

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that's why i move my balance around. It is so low now that the fee is about 30 bucks which is much better than a years worth of interest paid. they don't think we'll think of that either

[GST2008]

Let's not forget the BT fee. I just got an offer from one of my cards for 5.9% on BT's, and then you look at the fee which is something like 3% which I'm assuming goes in as a purchase. So now I have 5.9% a month plus a purchase of 3% of the total that accrues the regular interest.

[haulingthescoreup]

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@GST2008 wrote:
Let's not forget the BT fee. I just got an offer from one of my cards for 5.9% on BT's, and then you look at the fee which is something like 3% which I'm assuming goes in as a purchase. So now I have 5.9% a month plus a purchase of 3% of the total that accrues the regular interest.

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I read a post by someone who said that there was a cap on her (his?) BofA BT, but that's the only time I've ever seen it. Most BT fees cap out at $75-99, but not BofA. On an $8K BT, I paid $240. If you take a year to pay off the balance, that's sorta like having 3% APR. Not bad at all, but certainly more than 0%.