<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Stefan Daystrom:
Originally posted by pinniped:
I never got these before, but not I seem to be getting them almost weekly. A mailing from Citibank for my AA MC, offering 2.9% balance transfers, no fee, with the rate being good for the life of the balance.
The odd thing is that the AA MC is my primary card. I use it for $4k-5k per month in purchases. Because of this, I cannot take advantage of the 2.9% offer, and Citibank should obviously know this.
My question is: why are they sending me these? They are practically begging me to shut down all activity on the card, go to a zero balance, and then write a $15,000 check to my broker to invest their 2.9% money. Since they know and I know that I cannot use the offer effectively AND continue to earn AA miles, why are they so eager for me to completely stop using the card for purchases?
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You don't understand. They know that IF YOU DO THE MATH you'll realize that that's how you have to do it to gain anything from it, but they also know that many other people won't do the math, will fall for "1.9%" but use the card in such a way (also making purchases) that they pay 15% or whatever, and that's how they'll make loads of money.
I've noticed the exact same thing from other cards: They always send me the best transfer offers only when I'm using the card for purchases regularly or when I'm already carrying a low rate balance transfer on it. They hope I won't be smart enough to change my usage of the card, wait a billing cycle, and only then do the transfer. (But I am smart enough, hehe.) Meanwhile, the cards where I have plenty of space open and where I earn no rewards (sometimes from the very same credit card companies!) get few if any offers, because they realize the ONLY way I could use the card would have little chance of them earning more than the lowball percentage they're advertising.
These companies don't send you these things when they think they'll save you money (even though they claim they do), they send you these things when they think they'll make them money! 
When I use these deals I make a note to myself when the deal expires and dont use that card for anything.