Nice to have 0% on Apple purchases but those folks at Barclay card have a real scam going. Culled this from the itty bitty tiny print:

- To comply with regulatory requirements (yeah right), prior to the last 2 billing cycles any amounts that you pay above your minimum monthly payment will first be applied to any other balances on your account.

- During the last two billing cycles of your deferred interest financing promotional term, any amount paid over and above your minimum monthly payment will be applied to the remaining amount of your deferred interest financing balance.

- If there are two balances receiving a deferred interest financing offer rate and no other balances on the account, payments in excess of the minimum will be allocated to the balance receiving the deferred interest financing offer rate with the earliest expiration date.

Short version is this: either buy the 0% item and don't use the card for anything else or pay off the deferred interest balance in that two cycle window just before the expiration date. Way to set it up to increase the chance the customer screws up the timing and then gets charged full interest back dated to the original purchase date (in this case one year).

Hmmm, I guess you could look at it that way. I have and use a Barclay Apple reward card and use it pretty much only for Apple purchases. The occasional times I use it for something else, I pay that balance of within a billing cycle or two.

IMac, multiple MacBooks, several iPads over the years, couple of Apple Watches, and just yesterday an iPhone X. I appreciate the deal, makes it easy to spread payment out with. No additional charges. Also ends up providing a discount. My last iPad was effectively half price due to the gift card rewards from using the card. Never had a problem paying the deferred balance by the deadline, never paid a nickel of interest.

They provide the information, if people choose not to read the details of a financial agreement, not really sure how that is Barclay’s fault. If you don’t like the terms, don’t accept their offer.

As to print size, you can expand it if you look at it online...

I put everything... everything...on a credit card. I haven't paid one red cent in interest in almost ten years. Pay them off the same month.

It is true I did not read the full credit disclosure, so that is on me. However, to me, it should be simple: all payments go to the original "interest deferred" amount until paid off then any further payments go to whatever (if any) balance is due. What makes me a little mad it that their convoluted setup is clearly designed to screw people.

I do plan to continue to used the card. I thought hard about using it for anything else but my iPhone SE. Now that I know what they are up to I won't use it for anything else.

I once went to a furniture store to buy a room full of stuff. I had a big wad of cash in my pocket. Negotiated the pricing, and when it came time to pay the guy told me they were running a no interest promotion.

In my mind, good deal. I get to keep my cash and we will split the payments up with no interest. Sign me up.

I don't remember the exact terms, but let's say it was 12 months same as cash. If you made a late payment or you went beyond the 12 months, you paid a high interest rate retroactively. Not a problem.

I didn't think anything of it until my girlfriend picked up on the math. The monthly payment they proposed wasn't the total divided by 12. It was the total divided by 13 or 14. If you made the payments as presented, you would go beyond the cutoff and have to pay the interest on the entire deal.

I wonder how many people fell into that trap.

quote:

If you made the payments as presented, you would go beyond the cutoff and have to pay the interest on the entire deal.

I wonder how many people fell into that trap.

Was looking for houseful of new flooring once upon a time; local chain advertise 'zero interest' etc. Picked some materials for a given price, ready to load it up. They had a complex contract on paper with tiny print. I looked at the price and the ZERO % interest and offered same amount from the wad of cash in my pocket. They tried to add addition mysterious 'fees' of various kinds, bumping cash price nearly 50% from the original price.

After a brief discussion, pointed out they had 2 choices. They tried to do a bull shit shuffle. I took the 2nd choice, walking out with my pocket still full of cash.

quote:

Originally posted by muddle_mann:
It is true I did not read the full credit disclosure, so that is on me. However, to me, it should be simple: all payments go to the original "interest deferred" amount until paid off then any further payments go to whatever (if any) balance is due. What makes me a little mad it that their convoluted setup is clearly designed to screw people.

I do plan to continue to used the card. I thought hard about using it for anything else but my iPhone SE. Now that I know what they are up to I won't use it for anything else.

Or it is simple from a different viewpoint...

They apply payments to the portion of the bill they are currently charging interest on first, minimizing the interest by first reducing the interest bearing balance.

Economics 101 taught me that it makes financial sense to pay off whatever debts have the highest interest first as it tends to reduce total interest paid that way.

I won’t defend the interest rates charged or try to figure out why it may be as convoluted as it is (but I don’t doubt gov’t regulation has a lot to do with it) but I will point out that they are a business whose intent and purpose is to make money.

If you don’t over extend yourself and jump through the hoops, it is a zero interest loan and even free money to boot. Sure, some folks don’t pay attention but that is on them. I’d rather it work the way it does than to have to pay a nickel in interest or give up my rewards to protect the schmoos who Can’t figure out the program.

I have made a lot of money properly utilizing zero interest credits cards, loans, etc. You do have to read the rules and be careful. At one point in time, for several years, I was getting over 200 bucks a month from credit card "bonuses" to feed my wife's reading addiction. Unfortunately, the book chain sponsoring that card went out of business. Wonder why?

quote:

Originally posted by muddle_mann:
It should be simple: all payments go to the original "interest deferred" amount until paid off then any further payments go to whatever (if any) balance is due. What makes me a little mad it that their convoluted setup is clearly designed to Screw people maximize their profits.

I might agree with you if the credit card company was on your side but they aren't, they are out to make money. IMO not reading the fine print is classified as screwing yourself.

That is definitely tricky there.

When I bought our Trek bikes, I used their 12 month no interest plan. Bought $2,200 of bikes and accessories. I took full advantage of it and paid it off in month 12. Minimum payment was $200/month, which is what I did for 11 months. Then paid it off in month 12.

I guess I am a little confused, but you mention 0% interest and the snippet of agreement you posted talks about deferred interest. Deferred is not the same as none.

I don't put everything on a credit card, but other than that I am in full agreement with DaBigBR.

Some wise gentleman once said, "The difference between rich people and poor people is the direction of the compounding of the interest."

It's both actually. The card is currently 0% and the deferred interest relates to an iPhone I purchased with 12 months of no interest to pay off. The reason they use the word "deferred" is because if you don't pay it off before the deadline the interest is charged retroactively. At 14.99% that just ain't gonna happen to me...

quote:

Originally posted by slosig:
I guess I am a little confused, but you mention 0% interest and the snippet of agreement you posted talks about deferred interest. Deferred is not the same as none.

I don't put everything on a credit card, but other than that I am in full agreement with DaBigBR.

Some wise gentleman once said, "The difference between rich people and poor people is the direction of the compounding of the interest."

It's been a while since I've had those offers but, yes, they are "tricky." One tool I used to help me was using Quicken. I kept track of how much my actual balance was and had a note of when to pay it off. This was even when it was manual and I was mailing the payments.

They are not the only ones. Look at your statement or fine print. Look for either "Two" or "Double cycle average daily balance". It is a well used method in the credit card industry, and you should avoid it where possible. Nothing wrong with it if you NEVER carry a balance or wait two billing cycles after your 0% ends before using your card.

Eh.

Nothing to get mad over. It's actually beneficial to you.

Payments are being applied to items that are most likely to incur interest charges. First to the items actually accruing interest that month, then to your items with deferred interest.

At the 2 months leading to the expiration of your deferred interest, the card fail safes and applies payments to the deferred charges if you haven't already paid it off. Again, this is beneficial to you.


Look at it this way:

If you take advantage of a deferred interest offer for 12 months and your payments go towards paying off your the special promotion first, what's the point? If your new purchases are accruing interest charges and you can't pay those down until your special promotion purchases are paid off, then you'd really be complaining.



Month 1: $800 0% iPhone, plus $200 in groceries at 14%. You make a $275 payment. Don't you want the $275 to go first to the groceries and then the phone? Why would you want to pay down the phone first? It would leave you with $200 of groceries accruing interest charges!

Month 12: $175 left on your 0% iPhone, plus $200 in groceries. You need $375 to completely pay everything off, but you can only make a $275 payment. Of COURSE you want the payment applied first to the iPhone, because $800 x 12 months of interest is way more than $100 x 1 month of interest.

I have a Barclay card. It is one I haven't maxed out yet of my favorites.