Some time back I wrote about the AT&T Universal Card “0% balance transfer offer” that really costs 6%. Well I received another offer from AT&T Universal Card with the same hidden “gotcha”. Here’s the problem. Like many 0% credit card offers, the AT&T card has a balance transfer fee of 3%. Unlike most offers, however, there is no limit on the fee. In other words, to get “0%” for six months, you have to pay an upfront transfer fee of 3%. On an annualized basis, you end up paying 6% for AT&T’s “0%” offer. So this time I called AT&T and here is how the conversation went:
Dough: Just to be clear, there is no limit on the 3% balance transfer fee, correct?
AT&T Rep: [Pause] There is a balance transfer fee of 3%.
Dough: And the fee is based on the amount of the transfer, there is no limit to the fee?
AT&T Rep: That’s correct, but it’s just a one time fee.
Dough: [Pause] [More pause] So in other words, I’m paying a 3% fee to get 0% interest for six months?
AT&T Rep: [Pause] Yes, but as I said, it is a one time fee.
Dough: Can you limit the fee?
AT&T Rep: No, I cannot.
At this point I ended the call. What exactly was his point that it is a one time fee? How does that help us? In fact, all it means is that we pay the “one time fee” up front! Let me say that I don’t know how AT&T gets away with advertising a 0% credit card that really costs consumers much more. But forewarned is forearmed. Let’s be careful out there.