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

Post a reply to this message