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On Wed, 06 Aug 2008 09:28:51 -0700, Darren New wrote:
> Sabrina Kilian wrote:
>> No, part of it comes from the fee they charge all merchants for the
>> 'privilege' of supporting their cards.
>
> And part comes from the interest they charge you for not paying off the
> card before the end of the grace period. Personally, I've never had a
> problem with "scams" because I follow the contract and pay things off.
> Most of the complaints you read are along the lines of "I borrowed money
> and didn't pay back the minimum, so they increased my rates, whaaa
> whaaa!"
One of the nastier things they have started doing is sending out these
"convenience cheques" with low interest rates. You have to read the fine
print to see what the % is they're charging for the use of the cheque,
but even more insidious is that on some (Discover has done this) they
require you use the card 2 times a month to keep the lower rate, but the
payments you make go against the lowest interest rate first.
So, for example, on one of my Discover cards (don't ask - long story),
I've got a 0% transfer rate, but I have to use the card twice a month to
keep the 0% rate on what was transferred. But I get hit at something
like 14% on those two usages, and those two usages continue to accrue
interest until the 0% amount is paid off.
Fortunately, my two uses a month tend to be < $5 each (for buying lunch
in the office cafeteria), so they're not making a ton off of me for
that. But you have to manage it carefully and remember not to charge a
couple hundred bucks on it.
Jim
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