We received this in the mail. We always discard these but my wife had heard about this from a friend and read the details. We knew there must be a catch so we looked for it. (I couldn’t find the footnote for that asterisk, but I’m sure it’s somewhere in there :))
Discover’s agreement then goes on to talk about Finance Charges and Transaction Fees not applying to the Required Transaction amount, the date a transaction posts may be later than when you charge, etc.
No one gets a free ride. So there must be something in it for Discover. They must make a profit, so where would they get their money on 0.0% APR? :dubious:
We felt that Discover was counting upon human greed and slipshod money management. They just expected people to screw up and violate the terms. Discover could then start charging the regular interest rate on that balance transfer. So it should be fine if you payoff your card each month, right? We would just payoff the regular store/gas/etc purchases each month like we always do and paydown that transferred auto loan with the monthly payments we were sending to the credit union. Simple, right? Well, it is more insidious than that!
This was the last paragraph on the last page. My wife spotted it (she’s smart, but how she can think that well at 10pm is beyond me! :)). She called Discover and you can get the truth if you ask the right questions!
Imagine you charge $1500/mo and balance transferred in a $10000 auto loan. You’ve charged more than $50/month and you pay on time and no terms are violated. In fact you pay $2000/mo and $1500/mo would go to the regular charges and $500/mo would go to the auto loan, right? Wrong.
The statement above, verified with Discover, says that all monies paid to the account will go first to pay the low APR special offers. So that $2000 would all go to the auto loan amount. Your $2000/mo purchases at the regular APR would sit unpaid. :eek: And it would rollover to the next month and incur finance charges. And on and on until you paid off the auto loan amount. By that time, the regular charges have been building up month by and And accruing finance charges! I could actually see this bankrupting people! 0.0% APR FOR LIFE - because it’ll probably kill ya first.
Uh, we didn’t sign up.
Our friend had.