Comments on: WARNING: Some 0% Credit Cards Will Cost You A Fortune

By: shadox

shadox — Wed, 24 Oct 2007 03:22:07 +0000

That sounds like false advertising to me. But, of course, in this day and age regulators sit on their butts and plan their failed response to the next Hurricane Katrina.

By: DR

DR — Wed, 24 Oct 2007 01:50:13 +0000

nuShack, with the exception of 0% or very low interest rate cards, I agree. The only credit card we use during the month is an American Express and we pay it off each month. Otherwise, we use a debit card. The 0% or very low interest rate cards (e.g., 2.99%) we use to transfer some of our home equity (from a renovation) simply to save on interest expense.

By: nuShack

nuShack — Wed, 24 Oct 2007 01:42:14 +0000

I’ve come to the conclusion that credit cards are nothing but trouble. I’m in the process of paying mine off and getting rid of them. They are a profit center for banks, and a loss center for consumers.

By: DR

DR — Tue, 23 Oct 2007 23:06:11 +0000

plonkee, I agree. I’ve used 0% offers as a way to save money, but the transfer fees have all been capped at $75, so on a percentage basis, that was well worth the price of admission. With no cap on the transfer fee, you’d be better off with a 4.99% offer for the life of the balance (which many cards are offering).

By: DR

DR — Tue, 23 Oct 2007 23:04:05 +0000

jm, you make a good point. I was assuming that you pay off the credit card at the end of the 0% offer, but if you don’t, the annual interest rate for the first year really goes up.

By: jm

jm — Tue, 23 Oct 2007 18:22:41 +0000

sorry, make that 10.5%

By: jm

jm — Tue, 23 Oct 2007 18:17:15 +0000

How are you getting 3% == 6%?

3% for the first 6 months plus 18% for the 2nd 6 months (when the rate resets) is 12% APY.

It used to make sense to play the 0% balance transfer game, but increasingly not any more. They used to cap those deals at 3% or $75. If you were sheltering $5k of debt in this way, you were talking 1.5% APY, even less if you had an 18 month deal.

I’m glad I don’t have to do this anymore.

By: plonkee

plonkee — Tue, 23 Oct 2007 12:56:00 +0000

Wow, you only get to pay it once (until you stuff up in some way). I’d rather get to pay it not at all, or at the very least some sort of cap on the fee amount. I am not into paying for money. It seems to defeat the object.