- Category: Opinion
- Written by Jim Dee
Contrary to popular belief, credit companies aren't evil. I mean, it's a free country (pretty much), so you're perfectly free not to use them. Going in, you agree to their terms. If you fuck up (as I've done many times) and run up a gigantic balance, check the man in the mirror if you want to really know who's fault everything is ( financially speaking, I mean. I don't think anything excuses the customer service fuck-ups described on others' blogs -- like Monstro's, today).
The trick is, you can outsmart them at their own game if you think it through a little bit. I'll share an example. (I should really charge money for this, as it's so damn deviant. But, out of love for my fellow blogospheric denizens, this one's on me. Consider it the undeniably valuable content that keeps you coming back regularly to read my blog.) Now, for example, if you would like to screw Discover, it can be done, but it has to be done carefully.
Here's the BSUWG guide to doing so (most of the credit for this method goes to my wife, who did the groundwork on this thing):
1. Get their Zero Interest card.
2. Transfer thousands of dollars of high-interest debt onto the Zero Interest Card. Could be your car, other credit card debt, some other big outstanding loan, etc. In my case, it was my piano, which still had several thousand dollars left at a kind of crappily high rate.
3. Enjoy 0% interest.
4. Aha!, you say ... But there's a catch! Well, of course there is. I said you had to outsmart them, didn't I? You didn't really think it'd be that easy. So you ask: Why is it 0%?
5. It's 0% because there's a requirement that you make two purchases per month with your Discover card. Miss those two purchases, and your entire balance shoots up to 20-some-odd percent!
6. At first, you think: Well, that's not SO bad ... I'll just remember to make those two purchases per month! Maybe I'll use this as my gas card or something!
7. Yes, that's exactly what THEY want you to think! But again, I said you really have to think this one out ... See, those two purchases/month accrue interest at the normal rate (nearly 20%). But all payments to your balance go to the lowest rate ( i.e., the 0% money) first. SO ... If you have, say, $5,000 at 0% interest and pay $250/month on that balance, that's 20 months before you start paying on your high-rate balance -- 20 months of your buying gas and other goodies with reckless abandon. Trust me, Discover is more than happy to let you build up a huge, multi-thousand dollar balance, on which they're earning 20% per year until you get your 0% portion paid down.
8. THE BSUWG SOLUTION: Transfer all of your debt to a 0% Discover Card. Make those two purchases/month, but make them as SMALL as possible. I like to buy two 25-cent bags of Doritos (preferably the new Fiery Habanero variety, if available) each month. Over two years, that rounds out to a total purchase of $12. I don't care what kind of exorbitant compound interest you want to use in that calculation, I can handle it on a $12 balance.
9. Just be careful not to fuck up. If you miss a payment or forget to make those two purchases per month, the whole balance can shoot up to their regular rate. In some cases, the balance can shoot upwards for additional reasons as well. Read the fine print! But, so far, so good on our trial of this devious money-saving method!
10. Just to have a tenth item, I'd like to repeat the part about not fucking up. You really don't want to have $5,000+ costing you 20% a year.
Below, are the original comments on this post. Additional comments may be made via Facebook, below.
On May 22, 2007, wrote:
Ughhhh I hate credit cards!!!!