Rookie 0% card holder

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Bookishspider
 
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Rookie 0% card holder

Postby Bookishspider » Mon Feb 23, 2015 1:23 am

OK guys I have a question about a 0% APR AMEX card I have. It is the amex everyday card. I currently owe $2,500 on this card...In August the APR will kick in at 20.99%....I have had the card since May of 2014; Will i get charged more since I haven't paid it all the way off in the intro period or will I simply get charged around 40 dollars worth of interest? I know this is a dumb question but I just wanted to be sure on what I got myself into...


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jumbo
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Postby jumbo » Mon Feb 23, 2015 12:05 pm

As far as I think you will be charged $43.7 from August if you still have $2500 balance. And the interest might increase over time, because of the compound interest thing. (I'm not quite sure, may be some other members can chime in.)
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CarefulBuilder14
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Postby CarefulBuilder14 » Mon Feb 23, 2015 12:53 pm

If this is a question about retroactive interest (the 'no interest if paid in X months' kind of thing) then that's not something you have to worry about. Amex doesn't do that. 0% is really 0%. The 0% will last until the intro period expires or you trigger the penalty APR by being late or not paying the minimum.

I haven't crunched the numbers to test the accuracy your $40 figure.
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Brad Bishop
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Postby Brad Bishop » Tue Feb 24, 2015 5:56 am

Retroactive interest is usually on:
- balance transfers
- big purchases (like you buy a sofa and have 18 months to pay it off at 0% interest or you get hit with 20.99% retroactively).

It's not usually something on cards with no balance as there's no point to go back to in order to do the retroactive bit.

That being said, 20.99% interest is pretty steep and you will want to pay that down as much as possible or off by the time August rolls around.

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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Feb 24, 2015 9:52 am

Brad Bishop wrote:Retroactive interest is usually on:
- balance transfers.


Which BT cards have retroactive interest? I think that would be very unusual, except for maybe sub-prime lenders.

It certainly applies to large purchases on store cards, though.
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takeshi
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Postby takeshi » Tue Feb 24, 2015 10:13 am

Bookishspider wrote:I know this is a dumb question but I just wanted to be sure on what I got myself into...

You can always check the terms that came with the card. You should really understand them before using the offer.

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Vattené
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Postby Vattené » Tue Feb 24, 2015 4:28 pm

CarefulBuilder14 wrote:It certainly applies to large purchases on store cards, though.


Or as little as any $150 purchase at Walmart when paid within 6 months. One could do that on a single grocery trip. I think they're trying to reel in some suckers (and poor personal finance managers) with that one.
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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Feb 24, 2015 6:19 pm

Vattené wrote:Or as little as any $150 purchase at Walmart when paid within 6 months. One could do that on a single grocery trip. I think they're trying to reel in some suckers (and poor personal finance managers) with that one.


That could get complicated quickly, as many cardholders would probably have several different purchases with differing dates for special financing.
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Letting new accounts cool off since May
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Brad Bishop
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Postby Brad Bishop » Wed Feb 25, 2015 5:21 am

CarefulBuilder14 wrote:Which BT cards have retroactive interest? I think that would be very unusual, except for maybe sub-prime lenders.

It certainly applies to large purchases on store cards, though.


I wasn't thinking of a particular one. I was just thinking in terms of the game of starting off with a balance and then trying to pay that balance within 18 months or so. With BT you'd have that. I'm pretty sure I've seen people talk about BT + 18mo to pay at 0% or the retroactive fee.



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