Barclays Promotional APR Checks?
 

Hi guys,

I just got mail from Barclays today. It said:

"Use the enclosed Balance Transfer Checks to make purchases or to transfer higher interest rate balances to your Barclay Arrival Plus World Elite MasterCard" account.

For a Limited Time, Use your Special Low 0% Promotional APR:

1) You may also be eligible to transfer funds from your available credit directly into your checking account. Visit www.barclaycardUS.com for eligibility and details.
2) Transfer Balance from other credit cards
3) Finance home improvements or renovations 4) Write a check to yourself

Transactions must post to your account by April 4, 2016."

I was given 4 checks. Two blue checksd with 0% Promotional APR through at least Feb. 1, 2017. Transaction Fee: Greater of $5 or 2%. THe White checks are the same but through August 1, 2017 and the transaction fee is greater of $5 or 3%.

This is the first time I've seen this. Does anyone know what is this or if there's any MS opportunity for these checks?

BT checks are used to reduce your interest expenses if you are carrying balance (with interests) elsewhere.

There is no MS opportunity as most cards don't earn rewards for BT.

Really? I feel like Barclays sends me these every 6-8 weeks. They immediately meet my shredder.

Edit: just read the fine print on the back. It says this offer is not eligible to earn AAdvantage miles. No surprise there. But it does say in the table that the 20.54% APR will apply FROM THE TRANSACTION DATE, as mentioned below by biggestbopper. You miss paying it off by 1 day, ouch.

Shredding is probably the best choice. Or, rip in tiny pieces and flush. :D

Years ago the banks had offers with no interest for x months and no fees. Now, they like to hide the fees in small print and boast about the no/low interest.

The biggest danger is that if you make a little mistake in paying or computing things you will get hit with a huge, retroactive, interest bill. Say 25-30% or more of what you get from the check.

I have seen many who think they could outsmart the bank get hurt by this.

+1

I have not, but certainly see the potential for a huge disaster :(

I have not had that experience when using BT in the past.
Usually the interest rate goes to around 13.5% and is not retroactive, just on the balance at the time of the close for that month. I actually find it a good way to get money at around 4% with the BT fees.

JudyJFLA

I've actually used these twice when I needed small loans. I think the 1% fee is worth it for smaller amounts. Both times I did use them they were less than $5000 so I paid less than $50 to carry that loan for about a year.

Of course, if you don't pay it off in time, it's a horrible deal. I just wrote the check to myself once and the other direct deposited the funds into my bank account. It was really convenient, and I probably paid less for that than I would have had I taken out a loan with a bank.

Barclays even has dedicated page when you log on to your account to see when you took the offer which makes it easier to track and thus not forget when to pay it off.

Just my experience with it, but I've definitely used it and will more than likely use it again in the future. The amount taken out was less than 30% of my available credit limit with them so it didn't hurt my credit score, but that is something to consider.

If you can pay your credit cards off every month, you don't need this offer. If you want extra cash at zero percent, paying a small fee up front to utilize the zero percent is worth it.

I'm in a situation I haven't been in often, where a $1000 balance transfer would help pay the full statement balance on my primary card (from Chase). Of some 0% BT offers I've gotten, I was thinking of using one with a 3% fee on a card I'm not using, so I wouldn't have a balance on purchases. Now, on a card from Barclays, which mostly has recurring charges, I've received a BT offer of 0% until November 2017, and a transaction fee of 1%. The language looks different than usual about interest on purchases:

We charge interest on purchases, balance transfers and cash advances beginning on the transaction date. You can avoid paying interest on purchases if you pay your entire balance (which includes all purchases, cash advances, and new and existing balance transfers) by the payment due date each and every month. This offer includes a reduced APR on balance transfers during the promotional period. You can avoid interest on purchases without paying your entire balance. Instead, you can pay, by the payment due date, your entire balance minus this reduced APR balance transfer balance. To avoid a late fee, you should pay at least the minimum payment due on your account each month.

So if I read the bolded part correctly, if I have a statement balance in purchases of $500 each month, if I pay that in full as usual is no interest accumulating on that: the next month would be that month's $500 in purchases with no interest accumulating from the presence of $1000 balance transfer? Other examples I've seen of Barclays BT offers don't have that text and indicate that all purchases while carrying a BT balance will be charged interest.

For some possible weasel room, would "your entire balance" mean as of the last due date, or could they say something like my purchase balance was $500 at the statement close mid-month, but I had another $300 in purchases by the time I paid on my payday at the end of the month, so I had to pay $800 to avoid interest?

Yes. It is because of the Credit CARD Act, that an issuer must allocate the payment to the balance with the highest APR. So when you use your card with a BT balance, your payment will offset the balance subject to the penalty APR first (if any). Then cash advance (if any). Then purchase (if any). And BT or promotional purchase will be the last to credit.

It is based on your statement balance.

1% fee not such a bad deal
 

Barclays does have some fairly good offers, such as offering these deals with a 1% fee, on occasion, and 0% interest. 1% is not a bad rate for getting access to funds for a year or more, given that this is about the rate of inflation. It's even possible to get access to new funds in order to pay off a previous Barclays transfer, since the concept of a "balance transfer" is now a bit of a misnomer -- they are also happy to transfer money directly to your checking account without the requirement that the funds be used to "pay off" some other credit card balance.

I would, however, advise against using a card like this for both ordinary purchases and cash transfers, to avoid confusion about how payments are allocated. Once the card is used for cash transfer, it should be "put away" and not used for anything else.

My experience is that with several transfers, Barclays credits payments to the oldest balance transfer first. I recently paid off a balance transfer on the last day, and there was no interest due even though I have 2 newer balance transfers. It wasn't completely clear to me that this would be the case -- the statements were not helpful, and a call to Barclays offered several answers to questions I did not ask, and no clear answer to what I did ask.