bank rates

0% Interest!? The Deal’s In Our Mailbox

Banks are making life miserable for millions of credit card customers by cutting credit limits and raising interest rates on their accounts.

Yet the offers for new cards and special deals on existing accounts keep showing up in our mailbox.

Fifth Third Bank says we can pay 0% interest on purchases for the next 12 months if we’ll sign up for its Platinum MasterCard. Fifth Third will also allow us to pay only 3.9% on balance transfers for the next 18 months, although the 3.5% transfer fee is a little steeper than the usual 3%.

Capital One offered 0% interest on purchases through the end of the year and 30,000 bonus miles to open a Capital One No Hassle Miles Ultra MasterCard.

Then there were also a couple of offers to transfer balances from other cards to existing accounts:

Bank of America cut its rate for balance transfers to 1.99% APR through March 2010 with a 3% balance transfer fee.

Citigroup made a similar but slightly less lucrative pitch — 2.99% APY through Oct. 1 with a 3% balance transfer fee.

While we’re thrilled to get such offers, can banks really afford them when more customers are defaulting and credit card losses are mounting — the standard reason they give for rate hikes and credit cuts?

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Comments (6)
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6 Existing Comments
  1. Robertfel said:
    on April 20th at 04:11 am

    that great 0 % but it more costly than lower level in administration I think

  2. RateNerd said:
    on April 20th at 08:32 am

    The other new trick the credit card companies have started is to maintain your credit limit, but cut the mount available for cash advances. Seems too many folks are just pulling out cash to keep things afloat.

  3. KK said:
    on April 20th at 01:51 pm

    these special interest rates the banks are mailing out to
    their customers started around the same time the
    stress tests to see if the banks would start loaning
    money again did. i think the need people to use the
    offers in order to pass the stress test. plus the banks werent lending before and i think the gov tricked them
    into starting lending again by giving them these stress
    tests as an incentive because they want to pass the
    test. just wait and see if the offers disconue mid May.
    and if you need the offer, i say use it before then. do all your offers expire in May? mine do. and i have about a dozen of them.Chase, BofA,Citi,RBS,Discover,Wells Fargo,HSBC,Capital One. i hate how the gov made a big deal about the stress tests then made the banks keep the details secret. what other kind of test could they be getting?

  4. Dollar Bill said:
    on April 22nd at 02:10 am

    Beware of Fifth Third Bank credit cards. The branches are decent, and so is the central customer service. But this bank doesn’t have a credit card division, so HSBC is the bank that owns and operates all 5/3 (Fifth Third) credit cards.

    Then to top that off, HSBC doesn’t even service the credit cards!

    Household Bank, the credit card division (in the USA) for HSBC Bank does all the servicing. They are a NIGHTMARE. Fees, fees, fees. Card freezes all the time. Nonstop hassles. Tons more fees.

    Forget Fifth Third Bank credit cards people! Save yourself the NIGHTMARE!

  5. Dollar Bill said:
    on April 22nd at 02:12 am

    As an extra note, HSBC is a completely separate bank from Fifth Third Bank.

    Also, Household Bank used to be a separate bank, but they still kept their atrocious operating style even after they got bought out by HSBC.

    No thanks to Asian customer service, either!

  6. Terrin said:
    on April 22nd at 09:58 pm

    Are you guys kidding? Banks are forcing people to default on credit cards. Further, they lobbied Congress for the privilege of doing so. I am a bankruptcy attorney. Here is a classic example. Joe has three credit cards. Joe pays all his cards on time. Joe all the sudden misses one payment. That card refuses to forgive him and doubles his rate and charges him a penalty. The other two cards find out about Joe’s late payment and double his rates too even though he has never been late paying them.

    Unfortunately, Joe is on a tight budget because his company has cut his hours way back. So, the increase by all three cards has made it so he can’t pay anybody on time now. Joe calls up the proud to be american card companies and asks for help so he can make the payments. The card companies, however, refuse to offer any relief. They will keep the rates high, and charge him a penalty when he is late.

    The result, Joe’s debt to the companies quickly increases. Where he used to owe two thousand dollars, he now quickly owes four. That extra two thousand dollars is all penalties and interest. He quickly is way in over his head. He has no choice but to file Bankruptcy. The banks might have used to care. They, however, now have all this free tax payer money.