0% APR for Life from Discover Card

By | May 16, 2007

Discover Credit Card sent me a letter with an invitation code to 0% APR for life. It says that the 0% APR be will extended for life as long as I make two purchases each month in January 2008. The card has up to 5% cashback bonus that does not expire. I really liked the offer and wanted to apply for the card until…

I looked at the fine prints and saw the Balance Transfer Transaction Fee. It is 3% for each balance with a minimum of $5 and a maximum of $50. That’s a big catch, because this transaction fee will be charged the regular APR interest every month. Also, Discover Card may not give me a high credit limit based on my current Discover Card experience. My current Discover Card is under $5,000. The $50 balance transfer fee and a possible low credit limit have made the offer less attractive. It seems like my net earnings would be low.

I would consider it only if my credit limit is at least $10,000. Then I would put the $10,000 in a high-yield savings account, at around 5% at the present time. The interest earnings would come out to about $500 a year less fees. The other catch is two purchases a month, and I’ve already figured that out. I would set up an automatic recurring charge to the Discover Card for two transactions of 5 cents a month.

I’m not sure if I want to sign up for another credit card. I’ve already signed up for the Citi Professional Card and the American Express Diamond Rewards Preferred and I still have not activated the cards and claim the promotional rewards. If I sign up for another credit card, it may impact my credit score, which I am not too concerned with anyway at the moment. It appears the profits margins will be small, probably around $500, but contains a lot of initial hassle.

I did a search on the Discover Card 0% APR for Life promotion on Google and found Jonathan’s post on it.

0% APR For Life from Discover – What’s the Catch?

3 thoughts on “0% APR for Life from Discover Card

  1. JR

    Hi Smarty,
    I just read your post. Do you know what the offer code is? I applied for a 0% Discover card and credit spvsr will not change to the 0% for life (they call it “Debit Active Offer”) unless I can provide them the promo code.

    Thanks,

    JR

    Reply
  2. Jim

    How do you get the cash from a credit card in a balance transfer to put into a high yield savings account? Isn’t the transfer usually handled electronically and sent from one bank to the other?

    Reply
  3. Smarty

    JR, I already threw away the mail and I don’t recall seeing any offer code there.

    Jim, Some credit cards allow you to balance transfer or write a check directly to your savings account. If not, there are ways to work around it. One trick is to balance transfer to a credit card where you don’t have a balance. After the balance transfer, the credit card will have a negative balance, which means the credit card company owes you money and the company usually will make out a check to you. You then take the check and deposit it to your high yield savings account. It’s a little hassle, but some people don’t mind the work and depending on the balance transfer amount, the rewards can be worth it.

    Reply

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