[lace-chat] Credit cards

[Martha Krieg]

Oh, indeed, you are borrowing money from a credit card IF  you do not 
pay off the entire balance on the bill you receive within the correct 
time. Here in the States, they encourage a sort of "shell game" with 
these teaser interest rates, where you can indeed get 0% on a balance 
transfer (very, very rarely on purchases) "for the life of the 
balance" - but there is a really strong reason in these cases to have 
more than one credit card if you *do* have a transferred balance: any 
partial payment you make is applied first to the portion of the 
balance with the lowest interest. So if you also make purchases on a 
card where you have a 0% balance, those purchases are going in at the 
"usual rate" - anywhere from 12-16%. And the purchase balance will 
keep accruing interest at that ruinous rate until you finally pay off 
the 0% balance, at which point your payments can finally begin to eat 
into the purchase balance.

Another nasty item buried deeply in the finest possible print: that 
enticing 0% rate is going to bounce up to the usual rate, or even 
higher (maybe 19.95%) if  you default on even ONE payment on ANY 
card, not just this one.  So you have to keep really close tabs on 
things... and if that ever happens, you can't expect that the 
application you just received to transfer your balances to a third 
card at 0% will be honored after they check your record!

Why would anyone run balances so high as to want to transfer anyway? 
I was certainly raised to stay out of debt. But with loans for 
college tuition running at least 6-9%, it makes a lot more sense to 
keep it on a credit card at 0%. We've only got one more year to go, 
and then we can start paying everything off again!
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Martha Krieg   [EMAIL PROTECTED]  in Michigan

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