PENFED Balance Transfer language

[masscredit]

I recently receive a 0% BT offer from PENFED. It's for 12 months with a 3% BT fee. I was surprised to read this -

By taking advantage of this offer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payent due date. 

So if I'm understanding this correctly, if a person starts with a zero balance then does a $5K BT, he would have no interest for 12 months.  If the same person also uses his card to make a regular purchase, he would be charged interest on the purchase from the date that it's made unless he pays off that purchase AND the BT by the payment due date.  Is this correct?

[AverageJoesCredit]

Correct, welcome to Penfed

[masscredit]

I was thinking about using this offer. I'll have to change a few of my automatic billings to a different card then hide it in my sock drawer.

[AverageJoesCredit]

Lol, yes, i had to do that on my Boa card. Best not to use a card with a bt. Why complicate our lives right?

[FinStar]

Yes, aside from PenFed, a variety of FIs tend to have similar language as part of their BT disclosure.  So, to avoid any f/c's during the life of the promotional period (unless both purchases and BTs have the same 0% offer/promotion) best not to commingle purchases and BTs.

[CramEiko]

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@FinStar wrote:

Yes, aside from PenFed, a variety of FIs tend to have similar language as part of their BT disclosure.  So, to avoid any f/c's during the life of the promotional period (unless both purchases and BTs have the same 0% offer/promotion) best not to commingle purchases and BTs.

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Is PenFed stating that regular purchases aren't part of this offer? Or are they infact charging you interest on your new purchase including the full amount from the BT. I've never used a BT so it seems too complex to want to now. Like AJC was saying at the point of BT is it best to just SD that card? Good catch on reading the fine print OP. 

[DaveInAZ]

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@masscredit wrote:

I was thinking about using this offer. I'll have to change a few of my automatic billings to a different card then hide it in my sock drawer.

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And if you have any current charges on the card pay those off before doing the BT just to be safe. Most CCs are like this, if you make purchases after doing a BT you'll be charged interest on the purchases if you don't PIF the statement balance including the BT & purchases. Capital One is an exception, if you have a BT and make a purchase they tell you the "interest saver" payment that will cover the minimum payment on the BT balance plus the amount to pay the purchases and avoid interest.

[UpperNwGuy]

It's not just PenFed.  Many (perhaps most) banks do this.  My advice:  don't put a balance transfer on a card unless all prior charges have been paid off and it has a zero balance, and then don't use that card for ANYTHING ELSE until you have paid off the balance transfer.

[masscredit]

I never knew about this. I've used Cap 1 for BTs and also made charges during the month. I always paid off the new charges and then what was required (or more) towards the BT. Never had any interest.  I'll be paying more attention to the fine print of BT offers now.