Why am I still getting cheap balance transfer offers?

[soupcxan]

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.

 

[Goonie]

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.

 

[SecondCor521]

The other thing is that most offers these days come with a 3% or 4% upfront fee.

2Cor521

 

[uncledrz]

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.

 

[cute fuzzy bunny]

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.

 

[ejman]

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...

 

[Walt34]

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.

 

[Hamlet]

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.

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.

 

[BLS53]

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.

 

[harley]

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.

 

[jazz4cash]

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.

 

[lets-retire]

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.

 

[BLS53]

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?

 

[lets-retire]

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.

 

[maddythebeagle]

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....

 

[Marquette]

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.

 

[BLS53]

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.

 

[soupcxan]

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.

 

[clifp]

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.

 

[cute fuzzy bunny]

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.

 

[ohfrugalone]

I had a Chase/Amazon card that I opened up for free dollars on Amazon a few years back. They recently sent me a letter saying use the card for something or we will close it.

Then yesterday (or I looked at it yesterday) i got a transfer card offer for 0% - and was looking to see what bank was still sending out Credit Card offers. It said Juniper.com, which is Barclays. I am pretty sure it was all for $0/0%. It's already shredded.

 

[Nords]

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'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.

I had a Discover card that I didn't use for a couple years and they sent the "Sorry this isn't working out, we're cancelling your card" letter. A couple years later spouse got the same letter for her card.

For the last decade I've only used my USAA card for car rentals and an occasional tank of gas. They keep e-mailing offers for additional discounts on gas, which can't be helping either of us when we're spending less than $1000/year on that card. But for some reason they keep raising the credit limit every six months or so.

Fidelity has an affinity card that I've use for everything for the last five years. They insisted on sending a paper [-]advertising[/-] bill every month until I signed up for online billing. So now the paper's stopped. For some reason that credit limit keeps going up too.

My daughter and I share a Citibank card (which is only used by her). That's been handled online from day one and we only get snail mail when they send a new card. She's built up a great history on it, but unfortunately it's only under my name. When she turns 18 I guess she'll have to get her own card with USAA or NFCU.

I kept asking all the companies to never call, to stop sending mail, and to stop sending balance transfer checks. They complied.

The worst junk mailers are the airlines. It must drive them nuts that we never redeem their "frequent" flyer miles, that we never redeem them for magazines, and that we never apply for their cards.

 

[samclem]

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?

Let's protect everyone from everything, even if some people get hurt.
In Ohio, we're having a big political fight over "payday lenders" and whether they should be legal. Sure, the service they offer allows some people to do things that are bad from an objective financial viewpoint. Still, the campaign against them is anything but honest, claiming they charge interest rates of over 200% APR, etc. (True, their rates are high when computed as an APR, but what would a $100 bank loan cost if you computed all the origination fees and paid it off in two weeks?). If these places close down, poor folks with no credit who are short a few bucks will do what? Go to a loan shark? Write bad checks and pay those fees? These lenders and borrowers are both acting in their perceived best interests. The state should leave them alone.

If you want to go off on a moral, elitist tone, you're way off the mark.

Stamp out moral toning!

 

[harley]

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.

Especially since the government has done such a WONDERFUL job dealing with finances and credit themselves. My granny used to say "don't do as I do, do as I say". I hear her say that every time I hear a government official talking about how Americans need to assume personal financial responsibility.

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.

I can't disagree with you more. I believe there are a few individuals who don't or can't understand credit, but I think it's a very small group. And they need to have relatives or guardians watching over them. The huge majority of Americans are fully capable of managing credit and finances, they just refuse to do it. I guess I'd rather believe I live in a country full of lazy selfish people than a nation of retards. Sorry if I sound harsh, I've just seen so many people not doing what they KNOW is right that I get quite annoyed.

 

[lets-retire]

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.

If the supposed predatory credit cards give the required disclosures they have their fees and initial interest rate disclosed in them. Since the consumer has been advised of the policies who's responsibility is it to ensure the card is right for the consumer? In my view of the world the consumer has the freedom to decide for themselves if the offer is right for them. In your world someone else is responsible. It can't be the issuer or the consumer. Maybe we can have the a parent of the consumer authorize it. But what if the parent is not very intelligent? Maybe we can have Congress mandate that an intelligence test is given before any offer of credit or we can have the local government develop an office to determine whether someone is smart enough to handle their credit wisely. All of these ideas sound good until you get to the point of who pays for all of the extra government, enforcement, and who is willing to suffer the invasion of government into their private lives.

When you consider a person's credit report IS their test of how a person can handle credit then the answer has to be personal responsibility. This has nothing to do with intelligence but it everything to do with responsibility. If someone is not responsible enough to handle a credit card they will not be able to obtain too many with more than a few hundred or a thousand dollars on it. I know of many extremely famous and wealthy people who have horrible credit.

Marquette--You are correct the bartender can be held civilly liable for serving an obviously intoxicated person. If a person is moderately intoxicated or even just buzzed, they are most likely still over the limit and can cause just as many problems. I've had a person prosecuted for DUI and they only blew a .02 (state law was .10). The person was convicted due to their actions.