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Why am I still getting cheap balance transfer offers?
Old 10-04-2008, 08:57 PM   #1
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Why am I still getting cheap balance transfer offers?

Every month I have been getting those balance transfer checks from my credit card company (received another pair today). 0% interest for 9 months or 3% interest for the next two years. Yet all the media reports is how no one wants to lend any money. Apparently my bank would be happy if I took an unsecured loan for $20k from them at relatively low rates. Doesn't make sense.
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Old 10-04-2008, 09:14 PM   #2
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They're probably banking on things like people who take out large sums this way, to make a late payment or miss a payment, then they can jack the rate up from 0% or 3% to 30%......a lot of folks live their lives on the edge, living paycheck to paycheck, and making their monthly payments at the last possible moment. Then....OOPS....they're late one month, and their 0% goes to 30% overnight.

Plus the CC outfits bank on folks continuing to use that particular CC to make their normal purchases at their normal percentage rate. The monthly CC payments go to the lowest % first, leaving the higher % purchases to linger at those higher % rates....thus making the CC company more money. They're not as crazy as they think we are.
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Old 10-04-2008, 10:26 PM   #3
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The other thing is that most offers these days come with a 3% or 4% upfront fee.

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Old 10-05-2008, 06:58 AM   #4
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The other thing is that most offers these days come with a 3% or 4% upfront fee.

2Cor521
That's it, how many have seen 0% BT's with no transfer fee over the past 6 months? I haven't seen any, and they used to be fairly common.

So that banks are making the upfront money on this, as well as counting on the missed/skipped payment to boost the interest rate.
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Old 10-05-2008, 09:18 AM   #5
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The steady rain of them seems to have dropped to a trickle, which I find to be a good thing. I was getting a little tired of having my mailbox stuffed with balance transfer checks, considering I have about 50 people walk by my mailbox every day.

And they wont stop sending them, even if you ask.

But now I get a couple a month. None for 0% or no fee, plus I dont have any balances to transfer.

I did really enjoy the phone calls where they invited me to roll debt or transfer balances to the credit cards. I'd tell them I didnt have any, not one red cent. They seemed very surprised. One guy sounded like he was sure I was lying to him.

Seems like the credit companies are really pulling in the reins. I have a mastercard that I havent used in a while...maybe six months. When I called to activate it the guy gave me such a hard time about buying credit card insurance and other financial products I didnt need that I finally told him to forget it and threw the card out. I have plenty of other ones.

So yesterday I get a letter saying "Seems you havent been using your card, sorry we didnt meet your needs, your account is now closed".

I've never, ever seen a credit card company close an account due to low/no use. In fact, historically I've had a hard time getting them to close an account.
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Old 10-05-2008, 09:33 AM   #6
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I'm not sure if the credit card issuers are really cutting back on their offers - I continue to get a mailbox full of the stuff everyday in spite of calling the 1-800 get me off this damn thing number several times...
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Old 10-05-2008, 10:23 AM   #7
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We just applied for one to get FIL's hardwood floors refinished, interest-free for one year. I read all the fine print and found that after one year the interest rate goes to - get this! - 24.99% retroactive to the date of purchase. Wow. Rates that high used to be illegal.

So we'll be one of the ones that the bank loses the bet on, pay it off before the year is up, and meanwhile the funds will continue to earn interest for us.
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Old 10-05-2008, 11:37 AM   #8
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This is pretty typical for those deals. My 0% interest for a year on my new windows would have been even worse. I think the rate was pretty close to 30%, retro-active.

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We just applied for one to get FIL's hardwood floors refinished, interest-free for one year. I read all the fine print and found that after one year the interest rate goes to - get this! - 24.99% retroactive to the date of purchase. Wow. Rates that high used to be illegal.

So we'll be one of the ones that the bank loses the bet on, pay it off before the year is up, and meanwhile the funds will continue to earn interest for us.
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Old 10-05-2008, 06:01 PM   #9
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I think the days of everyone having a credit card are coming to an end. The credit crisis, combined with the liklihood of increased regulation, will result in increased scrutiny of creditworthiness.

It's probably for the better. The card issuers have caused alot of grief to the lower middle class and poor, by offering credit lines that their incomes couldn't support. Often with increased interest rates and fees, that line the pockets of the bankers, while inflicting financial pain on those who are existing on a marginal income to begin with.

Credit cards were originally meant for the business person, as a convinience for travel and other expenses. Today, they rank with gambling and substance abuse as a detriment to personal financial responsibility.
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Old 10-05-2008, 07:14 PM   #10
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Not a chance, IMHO. There is too much money to be made on the spenders. I think there might be a little more effort spent on not actually killing the goose that lays the golden egg, but they certainly won't walk aay from it.
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Old 10-05-2008, 10:20 PM   #11
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Since registering on the pre-screen opt-out website(www.optoutprescreen.com), I only get offers form B of A. They send two offers per week every week by mail and everytime I log out of online banking. The offers are lousy....0 to 1.9% for 6 to 12 months with 3% fee. The fee is no longer capped at 75 or 199 dollars or whatever like it used to be. I'm sure there's some way to get BofA turned off, but haven't made the effort. The credit crisis was a bit hyped......I don't think it will stop banks from making these offers, but they'll probably be a bit more selective.
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Old 10-06-2008, 06:12 AM   #12
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The card issuers have caused alot of grief to the lower middle class and poor, by offering credit lines that their incomes couldn't support.
It is the people with the credit card who have caused themselves grief. Just because a product is offered doesn't mean a person has to buy it, and just because a person has bought it, doesn't mean they must use it unwisely. If someone get drunk, drives a car and kills another person the car manufacturer isn't responsible. The driver is. If someone uses credit unwisely it isn't the card issuer's responsibility it is the consumer's.
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Old 10-06-2008, 07:00 AM   #13
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It is the people with the credit card who have caused themselves grief. Just because a product is offered doesn't mean a person has to buy it, and just because a person has bought it, doesn't mean they must use it unwisely. If someone get drunk, drives a car and kills another person the car manufacturer isn't responsible. The driver is. If someone uses credit unwisely it isn't the card issuer's responsibility it is the consumer's.
Comparing predatory lending to drunk driving, is a bit of a stretch, don't you think?
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Old 10-06-2008, 07:42 AM   #14
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Comparing predatory lending to drunk driving, is a bit of a stretch, don't you think?
Nope. The person did not have to apply for the card. The person also did not have to use the card after applying for it. If the disclosures weren't required then I could understand predatory lending not being the problem of the consumer (but only slightly), but disclosures are required and everything is spelled out in those disclosures. Even the onerous fees and interest rates.
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Old 10-06-2008, 08:45 AM   #15
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From what I see, the banks that were left in better shape, Chase, Wells Fargo, US bank are the ones continuing with offers....some of the "drunken sailors" are tighting up....
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Old 10-06-2008, 02:10 PM   #16
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It is the people with the credit card who have caused themselves grief. Just because a product is offered doesn't mean a person has to buy it, and just because a person has bought it, doesn't mean they must use it unwisely. If someone get drunk, drives a car and kills another person the car manufacturer isn't responsible. The driver is. If someone uses credit unwisely it isn't the card issuer's responsibility it is the consumer's.
I know that, at least in some states, if a bartender serves an obviously drunk patron, that bartender can be liable for actions of the drunk.

e.g.:

Court: Restaurants, bars liable for drunk drivers - Breaking News From New Jersey - NJ.com

In other news, we have a Citibank card with a $20k limit. We typically don't carry a balance or, really, charge anything on it. On the occasions where we do charge, we get one of those 'hey, write a check against your account, we'll give you a really cheap rate!' offers in the mail.
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Old 10-06-2008, 02:40 PM   #17
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Nope. The person did not have to apply for the card. The person also did not have to use the card after applying for it. If the disclosures weren't required then I could understand predatory lending not being the problem of the consumer (but only slightly), but disclosures are required and everything is spelled out in those disclosures. Even the onerous fees and interest rates.
That's the problem with you and many on this board. You assume a level playing field. You interpret "created equal" in the most literal sense.

Did you ever stop to consider that some people aren't as intelligent or as educated as you? Does that give some punk MBA from a multinational bank the right to devise financial instruments that the bank knows will eventually prove detrimental to the consumer? Meanwhile the same products, line the pockets of the banks and debt collection industry.

This isn't a 1950's lending environment. If you want to go off on a moral, elitist tone, you're way off the mark.
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Old 10-06-2008, 06:55 PM   #18
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Did you ever stop to consider that some people aren't as intelligent or as educated as you?
By gosh you're right - personal responsibility is also a 1950's concept that is no longer wanted or needed. I look forward to the day when the government has to approve every loan agreement to make sure that you can afford it. Lord knows we can't expect people to do that for themselves.
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Old 10-06-2008, 08:03 PM   #19
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I read in Time Magazine that credit card offers are down 17% this year.

I certainly have seen a decrease both on the quantity and the attractiveness on credit card offers. I used to get offers with a $50-$75 fee and 0% now days the offers carry a 3% fee and are often 1.99% interest. Considering the money markets are barely making 2% they aren't at all interesting.
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Old 10-06-2008, 08:18 PM   #20
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personal responsibility is also a 1950's concept that is no longer wanted or needed
I know you're being sarcastic, but its hardly far from the mark. Everyones a victim and nobody is ever at fault for their own actions anymore. I'm usually surprised when someone says "I screwed up" and eats their mistake or makes it right.
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