Be careful using Best Buy's credit card for big purchases this holiday...

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  • K_W

    Grandmaster
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    8   0   0
    Aug 14, 2008
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    Indy / Carmel
    I discovered that Best Buy's credit people (and likely other's) are playing games with the "no interest for XX months" (i/f) purchases.

    You would think the first thing you bought would get paid off first... i.e. buy a $800 dryer w/18 months "no interest", have it paid off after 16 mo with $50 payments (or 8mo with $100 monthly payments in my case)... NOPE.

    Turns out that, unlike a Bank CC, ANY "regular" non-promotional purchase, even an $9 SD card or $30 mouse, jumps to the front of the payment schedule.

    So, if you are like me and you use their credit card for occasional big purchases, but also for medium purchases here and there, and make pre-set automatic payments to maintain a good credit history (761 fico last I checked, and yes I know who Dave Ramsey is)... then your occasional big purchases get shoved back further and further down the payment schedule. UNLESS YOU MANUALLY CALL IN and state you want the promotional balance paid FIRST, all payments go to non-promotional balance. Even if you do state the payment goes to the promotional balance, the payment will be split evenly between ALL promotional balances unless you AGAIN state specifically which they are to go to.

    Turns out that of the current $650 balance (which I thought was almost all from a $500 TV plus a $200 microwave and $300 convection toaster oven that I bought THIS summer as part of a kitchen refresh) is actually $350 of LAST YEAR'S $800 dryer (18mo i/f), $200 of the TV (6mo i/f) and $100 of "regular purchases" (the oven and microwave were not on promotion)... and that NONE of last several month's $100 payments went to the dryer... I'll call in and MANUALLY pay $130 towards the dryer instead of $100 in "regular" payments for the next 3 months and avoid the addition $190 in interest they would have tacked on Jan 21st if I hadn't caught on, but shame on them for playing those games.
     
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    DoggyDaddy

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    I figured they'd do crap like that. And if you pay online like I do for almost everything, they don't offer an option saying "this payment should go to X purchase." It's a scam, but likely totally legal.
     

    BiscuitsandGravy

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    Ya. I think they count on most people not checking this and using auto pay. Then when you get hit after the 0% i/f period they can say- 'Its in the fine print'. They are not making $ by allowing you to pay off at 0%. Its a scam.
     

    Cameramonkey

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    Lowes credit card does this as well. But unless you get an idiot behind the counter who claims he cant, theirs is easy. "Hi, I'd like to make a payment. Please apply it to the promotional charge."

    I did the above while traveling in Evansville. Idiot's response. "I cant specify that sir. You will have to call the customer service line and have them change the payment after the fact." I responded "That is odd. They can do it at least up in the big city. I've paid 3 promotional payments in Indianapolis with no trouble." He just shrugged.

    But yes, always read the fine print. They are sneaky that way. And its really ugly since its accrued and you get hit with ALL of the back interest, not just what starts when the promo ends.

    Have you called in and asked to have those payments changed? Granted it was just the last one for us, but in the past Lowes has happily tweaked things like that for us when payments didnt get applied right.
     

    K_W

    Grandmaster
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    8   0   0
    Aug 14, 2008
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    Indy / Carmel
    Meh, Best Buy. I hold them in as much esteem as I do Wal Mart which ain't a lot.

    So do I, but they are one of the few places that let me actually poke, prod, and tinker around with with display models on my own before I buy something. I just tell the salesman what I am there to buy, but that I need to look it over first and I will find him if I have questions and when I am ready, and they happily leave me alone and go help another person knowing their commission on my sale is coming basically for free.

    They are not making $ by allowing you to pay off at 0%.

    They do too though... people are much more likely to buy more expensive items on "0%" than if they paid cash or on a normal credit card... this trick just compounds their profit.
     
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    MCgrease08

    Grandmaster
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    37   0   0
    Mar 14, 2013
    14,374
    149
    Earth
    I discovered that Best Buy's credit people (and likely other's) are playing games with the "no interest for XX months" (i/f) purchases.

    You would think the first thing you bought would get paid off first... i.e. buy a $800 dryer w/18 months "no interest", have it paid off after 16 mo with $50 payments (or 8mo with $100 monthly payments in my case)... NOPE.

    Turns out that, unlike a Bank CC, ANY "regular" non-promotional purchase, even an $9 SD card or $30 mouse, jumps to the front of the payment schedule.

    So, if you are like me and you use their credit card for occasional big purchases, but also for medium purchases here and there, and make pre-set automatic payments to maintain a good credit history (761 fico last I checked, and yes I know who Dave Ramsey is)... then your occasional big purchases get shoved back further and further down the payment schedule. UNLESS YOU MANUALLY CALL IN and state you want the promotional balance paid FIRST, all payments go to non-promotional balance. Even if you do state the payment goes to the promotional balance, the payment will be split evenly between ALL promotional balances unless you AGAIN state specifically which they are to go to.

    Turns out that of the current $650 balance (which I thought was almost all from a $500 TV plus a $200 microwave and $300 convection toaster oven that I bought THIS summer as part of a kitchen refresh) is actually $350 of LAST YEAR'S $800 dryer (18mo i/f), $200 of the TV (6mo i/f) and $100 of "regular purchases" (the oven and microwave were not on promotion)... and that NONE of last several month's $100 payments went to the dryer... I'll call in and MANUALLY pay $130 towards the dryer instead of $100 in "regular" payments for the next 3 months and avoid the addition $190 in interest they would have tacked on Jan 21st if I hadn't caught on, but shame on them for playing those games.

    As someone who recently started drinking the Dave Ramsey Kool-Aid, there is a lot I could say here, but I'll hold off. I've done plenty of dumb financial stuff in my day too.
     

    DeadeyeChrista'sdad

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    Feb 28, 2009
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    I can't believe that a fine group of upstanding, altruistic individuals like the hucksters who assume an old fart like myself couldn't possibly know which o.s. I need, or try to steer me toward massively more expensive TV's could possibly be out to screw you out of more money. Nah.... I ain't buyin' it!!!
     

    K_W

    Grandmaster
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    8   0   0
    Aug 14, 2008
    5,385
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    Indy / Carmel
    As someone who recently started drinking the Dave Ramsey Kool-Aid, there is a lot I could say here, but I'll hold off. I've done plenty of dumb financial stuff in my day too.

    Fire away... I made a few myself by listening to people I should have ignored... like my FINANCIAL ADVISOR who in January 2009 told me not to move a old college fund (tied to the tanking stock market) into my employer at the time, the stock later rose over 800 PERCENT and again to family when I wanted to do it after it corrected, and then rose even higher. I could have paid off the house and bought my wife a new Lexus, or put it in retirement.

    UYw0GKa.png
     
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    churchmouse

    I still care....Really
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    187   0   0
    Dec 7, 2011
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    Fire away... I made a few myself by listening to people I should have ignored... like my FINANCIAL ADVISOR who in January 2009 told me not to move a old college fund (tied to the tanking stock market) into my employer at the time, the stock later rose over 800 PERCENT and again to family when I wanted to do it after it corrected, and then rose even higher. I could have paid off the house and bought my wife a new Lexus, or put it in retirement.

    UYw0GKa.png

    Yeah me too. Trusting those we were paying to watch our money. :n00b:
     

    edwea

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    25   0   0
    Jan 25, 2015
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    New Dolan
    Credit cards=playing their game and their rules. You may save a few dollars in the short term, but will almost certainly end up losing. I have had them, but never again. Even if you do make all the payments etc., you open yourself to much more risk that I'd personally prefer to avoid.
     

    CHCRandy

    Master
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    5   0   0
    Feb 16, 2013
    3,699
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    Hendricks County
    I don't trust anyone to manage my financial affairs, including customer service, brokers, lawyers or fund managers .....I can make 2-3 times more return per year on my own than any financial advisor I have seen. This year, I have already made over 100% return and the best 2 months left to trade. I really expect to see 125-150% return this year.

    I use Lowes zero % quite often for purchases usually exceeding $5000 for materials needed on jobs...I get the zero % because it is automatic, since they don't allow 5% discount if you buy items on bulk discount. The easiest way to prevent this is to just call cc customer service and tell them you want the payment put on the promotional items, the store can do this as well at customer service, but I trust no one to do it right but me. The thing is though you may have more than 1 promotional offer going. Only way I have found to be sure I don't get hit with the deferred interest is to look at my bill every month. Last year I went to pay a bill and noticed I had a promotional discount expiring, had to pay $1500 to keep from getting hit with $600 in deferred interest. Kind of blowed having to pay the 1500, but it was better than paying 500 and seeing my bill balance increase the following month by $100. Sometimes I would rather them not put the payment towards the promotional though....if I make 3-400 in small purchases with no promotion, I would rather them take my large payment and pay everything but promotional first, then apply balance to promotional......that way I don't pay interest on a small purchase that had no promotion attached.

    Zero % is hard to beat if you are smart with it...you can make money using someone else's free money. Buying a new car with zero % is best thing ever. You can pay $22,000 cash or you can take the zero % and invest the $22,000 cash in an investment that pays you a 12-14% a year dividend, buy put insurance....in 6 years your $22,000 is $41,000, plus stock price appreciation, if any. You are making $250 per month in divy payments....so car is basically being paid for by dividend your cash is earning. In the end you get the car and have your cash. I know that don't work for everyone if your dividend earnings are being taxed, but with a Roth IRA they are tax free...you just can't take any earnings out before 59 1/2 years old, but you CAN take out anything you put in....just not earnings. So therefore at the end of the zero % if you want your $22,000 back...you take it and leave gains.
     

    BehindBlueI's

    Grandmaster
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    29   0   0
    Oct 3, 2012
    25,890
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    Credit cards=playing their game and their rules. You may save a few dollars in the short term, but will almost certainly end up losing. I have had them, but never again. Even if you do make all the payments etc., you open yourself to much more risk that I'd personally prefer to avoid.

    What risk? Certainly less than a debit card. Arguably less than cash if you intend on a large purchase.

    I use cash back cards and pay them off each paycheck. I never have a payment due since I pay them off every two weeks. I get 1-4% back on everything I buy. I opened a Navy Federal card and got $500 back, plus they'll refund $100 of $100 for TSA Global pre-check, plus no foreign transaction fees.

    Using CC responsibly is cheaper than cash, easier to dispute charges if a merchant screws you, and (if you shop around) comes with lots of little perks like warranty extensions, priority boarding on flights, etc.
     

    Gaffer

    Shhhh.......
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    I got this book free, and it has been priceless :>)

    [video=youtube;QzE76nUSjL8]https://www.youtube.com/watch?v=QzE76nUSjL8[/video]
     

    MCgrease08

    Grandmaster
    Rating - 100%
    37   0   0
    Mar 14, 2013
    14,374
    149
    Earth
    I don't trust anyone to manage my financial affairs, including customer service, brokers, lawyers or fund managers .....I can make 2-3 times more return per year on my own than any financial advisor I have seen. This year, I have already made over 100% return and the best 2 months left to trade. I really expect to see 125-150% return this year.

    I use Lowes zero % quite often for purchases usually exceeding $5000 for materials needed on jobs...I get the zero % because it is automatic, since they don't allow 5% discount if you buy items on bulk discount. The easiest way to prevent this is to just call cc customer service and tell them you want the payment put on the promotional items, the store can do this as well at customer service, but I trust no one to do it right but me. The thing is though you may have more than 1 promotional offer going. Only way I have found to be sure I don't get hit with the deferred interest is to look at my bill every month. Last year I went to pay a bill and noticed I had a promotional discount expiring, had to pay $1500 to keep from getting hit with $600 in deferred interest. Kind of blowed having to pay the 1500, but it was better than paying 500 and seeing my bill balance increase the following month by $100. Sometimes I would rather them not put the payment towards the promotional though....if I make 3-400 in small purchases with no promotion, I would rather them take my large payment and pay everything but promotional first, then apply balance to promotional......that way I don't pay interest on a small purchase that had no promotion attached.

    Zero % is hard to beat if you are smart with it...you can make money using someone else's free money. Buying a new car with zero % is best thing ever. You can pay $22,000 cash or you can take the zero % and invest the $22,000 cash in an investment that pays you a 12-14% a year dividend, buy put insurance....in 6 years your $22,000 is $41,000, plus stock price appreciation, if any. You are making $250 per month in divy payments....so car is basically being paid for by dividend your cash is earning. In the end you get the car and have your cash. I know that don't work for everyone if your dividend earnings are being taxed, but with a Roth IRA they are tax free...you just can't take any earnings out before 59 1/2 years old, but you CAN take out anything you put in....just not earnings. So therefore at the end of the zero % if you want your $22,000 back...you take it and leave gains.

    Wow 100-150% return on your investment. Please share your secret with the rest of us.
     
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