Was 0% interest too good to be true?
I have a credit card that has 0% interest until August 2008. Interest on regular purchases after that will be 6.8%…BUT cash advance interest will be 16.00%. I recently consolidated all my debt to this one credit card and my statement lists the Balance Transfers as “cash advances.” So my question is—-after the promotional period ends will my interest be calculated at the regular purchase percent or the cash advance percent? Thanks in advance to ANY help :)
Well….I guess I am lucky because with my BoFA credit card, once a promotional rate expires the interest is calculated at the purchase rate of 6.8%. I called and spoke with a customer service rep and she said that there are “unfortunate” card members who have retroactive interest or who pay the cash advance % but not at BoFA. I got pretty scared by the answers I got :) Thanks for all the answers it reminded me to triple check the fine print!
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It’s called a “teaser rate,” just to get you in the door. Start looking for another card between now and August 08.
It’ll be the cash advance percentage.
Balance transfers are ALWAYS seen as cash advances, so that is the rate you will be paying. I would try getting it paid off as much as possible…. and remember, balance transfers also often come with a 3% charge as well. sorry… :(
16%
so take your total amount and divide by 11 and see if
you can afford to send in the monthly payment so
it will be paid off before the 16% kicks in.
Depends on the deal in the fine print that came with the checks or balance transfer option.
I would start paying as much as possible off this debt before next August, that way you have a smaller amount to deal with.
Odds are that as long as you make more than the minimum and are not late on any payments, another company will offer you another teaser to transfer your remaining balance.
It all depends on the fine print; but reading it favorably, as long as you pay off the cash advance by August, 2008, you shouldn’t have to pay any interest at all. After that date you will probably have to pay 16% per year from the date you took the cash advance, NOT from August 2008. In other words the interest charges are probably retroactive unless you pay off the advance by the deadline.
You made a serious mistake. By making transfers into the card, you are incurring the high 16 percent interest. As you make purchases, they will incur no interest for the first 6 months, but any payments you make on the card will be viewed first as payments on your purchases and payments on your cash advances will be counted only if they are in excess of payments on your purchases.
When the 0% interest period is over, you will be charged the 6.8 percent rate on your purchases, but once again, any payments you make are first counted against the low interest items, so that you continue paying the high interest on your cash advances. Credit card companies love to have customers like you. You are theirs for life, and the interest cost is the highest you can pay.
At this point, you best approach is to make the maximum payments possible on your credit card and avoid using it for any purchases. Try to pay off the advances as soon as posible. After you have cleared that debt off your card, you can start using it to make purchases. It would be unwise to carry any debt on the card. You should be paying off all mothly charges in full and avoid the interest expense.
You might try going to your bank and ask for a personal loan to pay off the cash advances on the card. The interest rate may be lower. If you keep borrowing on your credit card, you will never be rid of the debt. Credit card debt is the worst financial strategy you can have. Good luck.
Gone are the days with 0% APR’s on balance transfers. The feature was misused so much that credit card companies thought it best to revoke these offers. The reason could be the loss of revenue to credit card companies but this habit of transferring balances frequently and avoiding the debt repayment was increasing the volume of credit card debt. Balance transfer is a good practice if done with caution and restraint. Here is a good credit card with low APR rates on balance transfers.
1. Advanta Life-of-Balance Platinum Card
This credit card issued by Advanta is very popular among the balance transfer community. The reason being that it offers a low 2.99% Fixed APR for LIFE on balances transferred within 3 months. That is an offer which few credit card companies can match. With this excellent balance transfer rate the Advanta Life-of-Balance Platinum Card offers Up to 6% Cash Back or Travel Rewards. The credit card has No annual fee, and the reward program has no limits on earnings. On the whole a good credit card to transfer the balances. Apply online at: http://www.credit-card-gallery.com/Advanta.html