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"I'm getting unsolicited offers for either "1% fee, 0% APR for 12 months" Lotsa fine print in those offers as far as what happens if you miss a payment (intere
by larrys 14y ago
"I'm getting unsolicited offers for either "1% fee, 0% APR for 12 months"
Lotsa fine print in those offers as far as what happens if you miss a payment (interest rate could jack up and retroactive things might happen). May or may not be the case in the one you received. I remember always getting offers of free financing on things for a year and if you don't pay off at the appropriate time you owe all the interest retroactive.
In any case, someone wanting to follow that advice really would need to read all the fine print and understand all the fine print before making any decision. I wonder how many people could do that.
- gojomo 14y agoIndeed; these teaser rates make money for the banks when most people who take them snap up to the higher rate (by error or simply keeping the balance after the promotional period). It's best to only take them when you can set up an automatic monthly payment, and zero the balance before the higher normal rates return. (Personally, I'd also make it illegal to advertise "0% for 12 months" if accompanied by "3% transaction fee" on the insider/fine-print. That makes the effective 12-month rate about 3%, which should be the headline. But banks, lotteries, and perhaps even government schools have an interest in keeping most people from being too good at time-value-of-money/expected-return calculations.)