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Before the Credit CARD Act of 2009, the credit card companies would apply any payments to the 0% interest rate. The 19.9% or 24.9% balance would not be

touched until after you paid off the 0% money! Now, the company must apply any amount over the minimum payment to the highest interest rate balance.

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Here, the 3.99% interest rate on balance transfers is not a “teaser rate.” However, any purchases would be at the 18.9% or 22.9% rate and, again, would

not be affected until after the entire balance transfer was paid off.

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Signature for credit protection

Signature for credit account application

They want you to get confused and sign the first one as

well as the second!

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What is my interest rate? You won’t know until after you signed!

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Would you pay to apply for a credit card?

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What?! You’re going to penalize me for missing a payment to some

other credit card?!

Thankfully, this was outlawed in

the new credit card legislation.

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Recently, the solicitations have been far more advantageous

to the consumers (at least the ones I have

been receiving).The competition must

be getting stiffer for good suckers, uh,

suitable hosts, oops!, I mean customers!

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How are they making their money with the 0% balance transfer interest rate offers?

They are charging you an upfront fee of up to 5% on

the balance transfers. Several years ago, they did

not charge this fee. This allowed many people to

borrow the money at 0% and then get 3% in a CD. Of course, CDs are paying

almost nothing now so this strategy no longer works.

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Now, here is a pretty darned good offer. 0%

for purchases for the first year plus enough “bonus

points” to get a free airline ticket once you

make $500 worth of purchases within 90

days. Is this enough of an incentive to acquire and use the card? You

have to decide. But remember, the credit card companies are

hoping that you will not pay off the balance

within 1 year. If you don’t, KA-CHING!

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Look at the foreign transaction fee! 1% is

typical and some credit cards do not assess a

foreign transaction fee. (Example: Capital One)

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