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.