Credit Cards

Tips, news, reviews, caveats, trends, updates and analysis related to consumer and business credit cards, and prepaid debit cards. From the interest rate specialists @ FedPrimeRate.com

Monday, February 06, 2006

Latest Balance Transfer Offers from BJ's MasterCard (Chase)

Got a pretty good offer in the mail on Friday from BJ's MasterCard®; this was not an offer to open a new account, as I already have a BJ's MasterCard in my wallet (BJ's is a membership-based, wholesale warehouse "club" a la Costco; the BJ's MasterCard is co-branded with Chase Bank USA [a.k.a. JP Morgan Chase].) The letter began:

"We want to be your number one credit card. We noticed that you recently made a large payment to your BJ's MasterCard® account [via a balance transfer] and want to make sure we're not losing your business. That's why we want to remind you again of these low-rate reasons to stay--it's our way of showing you that your business is important to us."

OK, so far I'm liking the tone of this letter. The letter goes on:

"You can choose which offer is best for you:
  • 0% fixed annual percentage rate (APR) for 6 billing cycles with check number [check #1] and [check #2].
  • 3.99% fixed APR until the balance is paid off with check number [check #3], [check #4] and [check #5]
Use your low-APR checks to save with your BJ's MasterCard account, to deposit for extra cash, or consolidate higher-interest balances. Write them for any amount up to the unused portion of your available credit--and enjoy the money-saving result."

Not bad. The 0% for 6 months offer is too short for my tastes, but the "3.99% until the transferred balance is paid off" offer is quite appealing and I may use it to pay off my Bank of America Visa card which has a balance of about $3,500 right now.

If I do take advantage of the 3.99% offer, I won't be able to use my BJ's credit card until the transferred balance is paid in full; not because of a restriction associated with the balance transfer offer--no, it's because if I were to make any purchases on the card, those purchases would be subject to high interest charges, and I would have to continue to pay the higher monthly finance charges until the account balance is reduced to zero. Making purchases on a credit card to which you've transferred a balance is one of the ways that the credit card companies "get you" with these deals. It's not devious or underhanded, it simply punishes those who don't have the discipline to either a) read the terms and conditions of the balance transfer offer completely, or b) stop using the credit card to which a balance has been transferred. Make a purchase on a card to which you've transferred a balance, and most banks / credit card companies will apply any and all monthly installment payments to the lower-interest, transferred balance(s) first, leaving all other purchases and cash advances subject to the card's standard (and sometimes higher than standard!) annual percentage rate, and they'll keep doing this until the transferred balance is paid in full.

My dilemma is this: my BJ's MasterCard is currently the only credit card I'm using for temporary financing of the usual odds and ends of life. This is because all my other credit cards are either tied up in balance transfer deals or have a standard APR that is relatively high (for me, relatively high means anything higher than 9.99% APR.) I could just transfer my Bank of America Visa card balance using the above deal, then start using my Bank of America card for everyday financing, but then I would lose all the great rewards benefits that are built into the BJ's card.

No big deal, really. I'm probably going to transfer my Bank of America Visa balance and start using that card, because even though the BJ's card rewards are great, they require one to spend quite a bit in order to take maximum advantage of the rewards, and I don't plan on making any major purchases any time soon.

Thanks for reading. Stay tuned for the latest on my adventures in the world of credit card balance transfers.

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