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Credit card interest rate soars to 69 percent
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I cant say how many times over the years I have done this 0 percent financing deal. Sears, Lowes, Circuit City and over Christmas I bought a $2000 diamond ring at Gordons Jewlers 0 percent for 12 months.
They ONLY way you should do something like this is if you are absolutely sure you WILL pay it off and ALREADY HAVE the money laying around to pay it off if the need arises.....
Are you on the ragged edge of paying your other monthly bills and the minimum payment will be a stretch? THEN DONT DO IT......
Simple.....
They ONLY way you should do something like this is if you are absolutely sure you WILL pay it off and ALREADY HAVE the money laying around to pay it off if the need arises.....
Are you on the ragged edge of paying your other monthly bills and the minimum payment will be a stretch? THEN DONT DO IT......
Simple.....
TallBill
Lifer
Yeah, the worst part was that they signed legally binding contracts. The military base still stepped in and helped re-negotiate the contract to some extent. But the idiots that fell for it still paid quite a bit of money. And of course, the base integrated this story into their training.
There are cases where using your CC even when you can't pay it in full immediately can be very beneficial too though. For example, I am using my CC in the form of a cash advance to help pay the expenses that it will take for me to close on a home. I have a fully blown out plan A, B, and even a C to make sure that any of the debt I accumulate as a result will get paid off and that there is almost zero chance of making any late payments. I could simply wait another 6 months or so to save that money up in cash, but then I would need to think about all of that extra rent money I would be paying during those months when it could be used towards a mortgage on a house instead. Sure, I will lose some money on interest, but not anywhere near as much as I will be losing by paying those rent checks.
Beyond that and other selective reasons and emergencies I tend to agree with you though.
sactoking
Diamond Member
It's funny that in this case we (ATOT) mostly agree that the 69% is misleading. It's funny because the Truth in Lending Act requires the lender to call it 69%, since to say "20% + a whole bunch of fees and back interest" was deemed misleading by too many people and caused the TILA to be passed in the first place!
If you have the money in the bank BEFORE you buy anything on credit, and you have automatic bill payment set up, you have the same safety.
I don't advocate floating a balance with the assumption that your next paycheck will cover it, or using a "promotional period" to pay for something that you couldn't afford otherwise.
EMPshockwave82
Diamond Member
Very misleading and irresponsible reporting.
MrDudeMan is right. These offers don't just all of a sudden start charging interest from when the offer ends. If you don't meet the offer requirements by paying it all off before the offer ends then you get whacked with all the interest from the previous months as well.
People using this deal look out.
People reporting on this should do research before trying to make the company look bad for the purchaser's stupidity.
mugs
Lifer
It doesn't sound like their interest rate is 69% at all.
The 69% was a one month "catch-up" rate to retroactively apply all of the interest that had been waived on the condition that they paid on time each month. They are not paying 69% interest. This is not usury, this is should not even be a story. This is a pretty well-known clause in promotional credit deals - if you default, the promotion becomes invalid from the start.
The 69% was a one month "catch-up" rate to retroactively apply all of the interest that had been waived on the condition that they paid on time each month. They are not paying 69% interest. This is not usury, this is should not even be a story. This is a pretty well-known clause in promotional credit deals - if you default, the promotion becomes invalid from the start.
lupi
Lifer
while the law just passed, our good buddies the credit card lobbyist made sure it had like a 2 year date till it goes into effect. Besides, for this story if I read it correct the 69% interest isn't the actual monthly interest but the compounded effect from them not paying off a promotional 0% interest bearing balance.
AlienCraft
Lifer
I agree with you, this mantra has been institutionalized and ingrained in our economic system over the last years that it has usurped the original Puritan Ethic of Save and Pay Cash that originally made this country, and by extension our economic system, strong.
This consumer has taken draconian measures to pay down consumer and auto debt and will be debt free in less than 90 days, provided the bottom doesn't fall out. 😀
AlienCraft
Lifer
Yes indeed, That little asterisk at the end isn't decoration. There's a whole alligator pit full of fine print for you where it's asterisk buddy is hiding.
I once bought some gear at Guitar Center on a promo deal. Didn't pay attention to that due date and got whammed with the accrued payments. Once that happens, it's best to get it back on a payment schedule before you get into a default / repo situation.
These people get no tears from this Alligator Hunter.
sactoking
Diamond Member
This has nothing to do with Ronald Reagan or even 69% interest rates. The people had a deal, which they broke, and were assessed penalties for the breach.
The Truth in Lending Act, which was passed to make lending agreements more easily understood by borrowers, is in this case obfuscating the issue. TILA requires that the back interest and penalties owed be factored into the quoted rate, which causes they EAR (Effective Annual Rate) to balloon to 69% even though the APR is a much less staggering ~20%.
marincounty
Diamond Member
Republicans also took away the deductibility of credit card interest from your taxes.
That's a tax cut that should be restored in my opinion.
There will always be morons, it is part of the govts job to protect morons from predatory companies.
halik
Lifer
*ONLY* if it's in our best interest. If it somehow ends up costing us (collectively speaking) more money, then yes, gov't should step in. In this case, the only result is some morons paying thru their ass for furniture.
If you cap CC rates at 12% (or some other arb. rate), then you'll get an a ton of people complaining left and right that they can't get credit cards. The reason why CC companies charge such a high rate is because they (on average) don't recover anywhere near the balance owed.
So either everyone is able to get a CC and people with bad credit get ripped at huge APRs, or few people CCs and aprs will be lower.
amdforever2
Golden Member
They did not pay 69%.
If you take six months of interest deferred, then bill it all at once, then annualized it may appear as 69% that one billing cycle.
$10, $10, $10, $10, $10, $10 may show 20% each month
$0, $0, $0, $0, $0, $60 will cause month number six to look ridiculous because six months worth of interest is being displayed on one bill. $60 over six statements is maybe 20% each stmt, $60, $50 of which is really from prior bills, being placed on a single statement may annualize to 69%
If you take six months of interest deferred, then bill it all at once, then annualized it may appear as 69% that one billing cycle.
$10, $10, $10, $10, $10, $10 may show 20% each month
$0, $0, $0, $0, $0, $60 will cause month number six to look ridiculous because six months worth of interest is being displayed on one bill. $60 over six statements is maybe 20% each stmt, $60, $50 of which is really from prior bills, being placed on a single statement may annualize to 69%
SoulAssassin
Diamond Member
As previously stated this is very misleading reporting, fees and retroactive interest will throw that number way up but it's not an accurate representation of their APR. Reported is dumber than the people.
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