So, I’ve been playing this little game lately with my credit card companies, and it’s taken an interesting turn. Perhaps my opponents are more wily than they first appeared … but I shall have the last laugh!
We constantly get those “0% interest for a year!!!” offers in the mail. About a year ago, on the advice of the guy who does our taxes, we took one of them up on the offer of a one year, interest free loan. We took the “put cash in your bank account” option, and made exactly the appropriate payment to make it be gone in 12 months. There was a small fee up front … but it was well less than even a month’s interest on the balance … and we wound up with “liquid” cash in hand to do stuff like buy new water heaters and throw in an interest bearing CD (which handily covered the fee). So, we wrote ourselves a “12 months, same as cash” offer for whatever we wanted.
Note: This is a game that you should play only if (a) you are pretty darn organized, or (b) you are the master of automatic payments. It would be very easy to get burned by an unexpected expense or mere forgetfulness, and wind up carrying credit card debt.
About a month ago, the company started showing me *another* interest free balance transfer offer, whenever I logged in to make a payment. “Aha,” I thought … “they’re pretty sneaky.” See, each dollar you owe to a credit card company ages at its very own rate … and they invariably pay off the lowest interest rate dollars first. Thus, if I had re-upped and taken out more cash before paying off that first balance, I would have had an interest bearing balance at the *bottom* of the stack, that I couldn’t pay off until I had gotten rid of the new balance on top of it. I thought it was pretty slick that they would make this offer just a couple of months before the first one came due.
However, I decided to be doubly sneaky and pay off the original balance *before* taking out the new one. Ha ha! Take that, credit card company! I can play your game just as well as you! So I paid it off early … and today, after the payment hit, I was going to re-up for another year of interest free loan.
This morning, I find that they’re not really all that simple minded. The instant that my original balance payoff hit … the 0% interest offer went away as well. It was replaced with a 6 month, “no fee,” 6.9% offer. Nice, and all … but that’s not free. I see that they know the game as well as I do.
No problem though … I’ll just take this other offer out of the mail from this morning, and continue the game.
The only thing that really bugs me about this is that I know that the credit card companies win in the end, over the population. I paid them my small fee … so they actually made money on me … but anyone who screws up and misses a move will wind up being taken for a ride.
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