forum thread Posted by textilestandard • Jan 24, 2021
Jan 24, 2021 8:58 PM
forum thread Posted by textilestandard • Jan 24, 2021
Jan 24, 2021 8:58 PM
YMMV - Discover Card Holders - APR Reduction/0% APR Promo through Chat
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zero percent interest are for us to establish a suitable less painful emergency fund or good excuse to finance a large purchase or give you are break if you are running up a lot of interest or to risk someone else's money whether for business or personal reasons. for the bank, they get you use to running their card everyday or running up a balance hoping you can't pay.
Of course they're not going to apply the promotion retroactively to existing charges and remove interest that you've already agreed to pay.
your billing date is on the first of the month and
jan 1: $0 balance (and your rate is 2% per month)
jan 5: you charge $1,000
jan 10: you charge $500
on jan 15, i'm discover card and i look at your activity and i see you have a $1,500 balance and on feb 1st when i bill you, i going to ask you pay $1,500 on that day (no interest) or on feb 15, you owe me interest ($30). but i see you pay off your bill every month so it is not likely i'll get this interest from you....unless i cheat.
so on jan 16, i send you a zero percent offer for 12 month starting on jan 17 and you say ok i'll take it.
jan 17: you charge $1,200 (at zero)
jan 20: you charge $1,800 (at zero)
so now, on feb 1st, i bill you for $4,500 in total.
i'll cut to the chase, if you pay $1,600 ($1,500 prior + $100 on the interest free balance) on feb 1st thinking you are going to continue to run interest free, you will likely get a bill on mar 1st with $30 interest added. discover will take your $1,600 payment and reduce your $3,000 bucket down to $1,400 and you will be left with paying interest on $1,500 until you clear the interest-free bucket first.
this is how banks cheated in the 90s, there might be laws (on allocation) these days, i dunno because i don't play these games anymore. in my example, you should either pay $4,500 on feb 1 and then switch to minimums after or you don't charge anything else after jan 16 until you paid the $1,500.
so imagine this: you have a big huge balance that you have working on for months and it looks like you're paying it down pretty good and could be done with it in one more year. so the bank throws you "a bone" with zero percent and you spend even more and your payments allocate towards the zero interest bucket while the interest bucket remains high and builds even faster (because the interest accrued is piled back into the same high interest bucket) AND on top of that, somewhere along the way they send you a letter telling you the interest rate on the other bucket is going up ten points next week and if you don't agree with, pay the entire [$10,000] balance by the end of the month and close the account (if you can). i guess bank statements look different these days but back in the day, unless you had a nice calculator and a higher math education, you were a victim.
sorry for being so long.
IOW, completely clearing the balance of all charges on the day after the promo starts avoids the whole issue, no?
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IOW, completely clearing the balance of all charges on the day after the promo starts avoids the whole issue, no?
but if i were discover and looking at your statement of current activity, i would start your promo several weeks back after you've already made purchases. if you racked up $500 in purchases between the 10th - 12th and today is the 20th when you calling for the promo, i would tell you this 0% promo for you starts on the 5th. what are you going to say "no ma'am, i would like to keep paying interest right up until the 20th?" if you don't know what's really going on here, you'll take it...and it will cost you.
so let's say the system won't start the promo until the day you call, the 20th. on the 21th, you make that payment to clear away the entire prior balance (that is accruing interest) so you can start fresh on the 22nd, right? if your statement doesn't cut until the 31th, you still don't know for sure how the payment is applied to your account. maybe 21/31 of the payment will cover prior balance and 10/31 will go towards the 0% bucket. or if the bank is really dishonest, we don't care when you made the payment (we'll take it) but after the due date, the payment doesn't count until the "next" due date. we don't calculate average daily balance across different interest rate buckets and mid month payments don't count for much.
I've had credit cards my entire adult life. My credit score has been Excellent since I established credit. Over the past 6 months, I noticed 2 things that may be YMMV or more widespread:
1. I've gotten more 0% purchase offers from existing cards. Two, for example, are Citibank from January to August 2021. And Barclays from February to September 2021.
2. At the same time, the 0% balance transfer (BT) offers have completely dried up. I used to get at least 4 mailers a month. In the last 3 months, I only got 1. I was curious the other day and logged into 5 random credit cards, and I have zero balance transfer offers. Is anyone else seeing the same thing regarding BTs?
Thanks!
Sorry to hear about the loss of your friend.
Good luck!
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Also got another card APR lowered.
Thanks