by Tricia
In the mail yesterday was the statement for Credit Card #6. That’s our store credit card that we applied for and received to take advantage of 10% off the purchase of our stove. Saving over $60 seemed like a great deal so we went ahead and applied. As an extra bonus, the card came with the offer of zero payments and 0% interest until March 2007.
Anytime a store credit card offers a deal like that, you should make sure of two things…
1.) If you still have a balance on your card when the special offer expires what is your interest rate?
2.) Will you be charged back-interest (meaning they will go back to when your charge(s) originated and charge you interest) when the offer expires and your balance is not paid?
I asked the sales lady those questions and she said that “their” card is different. They do not charge back-interest and when the offer expires there is an interest rate of 24%. The interest rate wasn’t a good one, but we were planning on paying the card off before the offer expired. Everything seemed straightforward enough for me.
This was back in March. We received our first statement in April and I looked at it. Everything seemed fine and I saw the terms of zero payments and 0% interest and all looked well. The months passed by and I opened the envelopes but didn’t really look at the statements. For some reason I looked this month and I was shocked. I was being charged a finance charge!
As it turns out, our stove was under the special deal, but the cord we purchased for $14.00 to go with the stove was subject to finance charges! I’m not sure at this moment if it’s because the sales lady rang up the two items separate or because the special offer only applied to major appliances.
In either case I am upset. Upset at the store because I feel duped. Upset at myself for not noticing this sooner. It’s only been $1.00/month (due to the minimum finance charge being assessed), but I really feel like I should have known better.
It is my fault for not being vigilant with my statements for that card, but I still feel like going into that store and compaining since I was under the impression the whole purchase would be under the special offer. The sales lady was very misleading (and, as a sidenote…she’s the owner of the store).
I was going to wait until January or February to pay off Credit Card #6, but in light of this recent development – it’s now next on the chopping block to get paid.
This is a case where you don’t want to let emotion make you do something financially unwise!
First of all, contact the company and see if they will reverse it because you’re unhappy about it… for the peanuts it is I wouldn’t be surprised it they do… even if not, just pay the cord off and leave the rest of it at 0%, Jan/Feb is still 4 months away, and the interest you’ll save by paying down your high interest card is probably huge! Do the math on the difference between the two before you do anything!
I know what it’s like to get ticked off and react, but the one time I did it I lost over $3000 (a disagreement on a mortgage term so I went to another bank, not as good a rate, but salvaged pride).
Sometimes the best laid plans get thwarted. Just roll with those punches and keep on chugging. Be glad that you’ve got the ability to axe it next.
But Steve has a good point. Give them a call and see what they can knock down.
Store cards are very sneaky. I got caught in something like that when I bought my laptop years ago. I wasn’t paying attention and in the end I beleive I payed more than the cost of the laptop in interest.
Point taken! I was just going over our current statements, being sure to watch every single detail. I found that we had one late fee from May 2006. We were being charged 14.85% just on the late fee! The rest of the balance was from a balance transfer offer of 5.99% until paid in full. I had not noticed the $39 accruing interest since my June statment! I thought I would call anyway. At first the customer service rep seemed unsure if he could help. Then I started asking how many times I had been late and how late and how many times I have asked for consideration on a matter like this. His answer to all of these questions was, that I had never been late before or since and an exception could be made due to my excellent payment history! He credited the late fee and all of the finance charges accrued on it! Yay! Thanks for the excellent reminder that I AM in charge of my own money!
Steve – thanks. I needed to calm down, for it is very easy to get caught up in emotions. As soon as a get a chance (and unfortunately work has been busy..busy during AND after business hours) I’ll give them a call and give it a shot. I’ll also run the number to see what is a better plan.
Mapgirl – actually, it feels pretty good that I have the ability to give them the axe. I didn’t have that ability before and I just had to live with it. I’m starting to feel like I have more power to call the companies with (like I’m a better customer now).
Matt – wow. That’s a lot of money for a laptop. But, we live…we learn…
Dawn – that’s super news! You tell those credit cards a thing or two! 😉
Response to post #1 (from Steve): I don’t think you can choose which debt to pay off on your card. I rotate my credit card debt to 0% cards, and found that any payments you send to the card always apply to the lowest APR first (ie, the 0% charges). This means that until you pay down that oven, none of your payments will go to pay off that $14 cord.
If anyone has more insight, I’d love to hear it since right now my credit balance is sitting on a rewards card that I could otherwise be using!
$14 is not going to incur much interest. Listen, you got a fine deal. You just got dinged a little. The industry is designed to ding you, so take this minor lump and try paying CASH next time. ONLY if your other loans are already at 0% should you pay this down now. Your rate is essentially under 1%.
Read every pitch carefully, and check every statement’s balance, minimum due, date due, previous payment received, the previous payment date… EVERYTHING. Recently I took what I thought was a 0% loan, but now they say it’s 10%. Ok, I’ve already paid it back. So I lost $24. Mistakes happen. Quantify how truly terrible this cord con is in dollar sums and never take your focus off the highest rate debt. I bet this isn’t it.
Clever Dude – good point about the payments. I think that’s how my one card works because I watched my high interest rate balance sit idle while I ended up paying a lower rate balance transfer.
John – yeah, I did get dinged. I’m just tired of feeling like I get dinged. I guess what it boils down to is that I just want them all gone! 🙂 Your right though…that card isn’t the highest rate.