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American Express sent me a promotional offer to lower the interest rate on my credit card for 12 months. I don't carry a balance on any credit cards. I can't think of a good reason to accept this offer other than "flexiblity", which isn't very valuable to me at this time.

However, is there any reason not to accept it?

Additional Disclosures

1Eligible purchases made during the promotional period with your enrolled ___________ __________® Credit Card will receive a promotional 6.99% APR for the duration of the promotional period. After the end of the promotional period the APR for these purchases will be a variable rate, based on Prime Rate plus 13.99%, currently 17.24%. The promotional period begins the day after you enroll, and is valid through the following 12 full billing periods. The promotional APR will not apply to any purchases made before or after the promotional period. Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of travelers checks, purchases or reloading of prepaid cards, or purchases of other cash equivalents. The Cash Advance APR and Penalty APR(s) still apply to your account as reflected in your Card Agreement.

To qualify for this offer, you must enroll on or before January 31, 2016. Only Card Members invited to participate may enroll. This offer is not transferable. You will not be eligible for this promotional APR if you accept another promotional APR offer from American Express prior to responding to this offer.

To modify your receipt of valuable offers from American Express, please visit www.americanexpress.com/choice.

  • Would you be paying an annual fee to American Express if you took them up on the offer? – JB King Dec 23 '15 at 16:53
  • @JBKing: There is no mention of a fee. I will add the Disclosures statement to the question. – Jacob Krall Dec 23 '15 at 16:59
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This bit of marketing, like the zero-percent introductory rates some banks offer, is intended to make you more willing to carry a balance, and they're hoping you'll continue that bad habit after the rate goes back up.

If you don't think you'll be tempted by the lower rate, yhere's no reason not to accept (unless there's something in the fine print that changes your agreement in other ways; read carefully). But as you say, there's no reason to accept ir either. I'd ignore it.

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    @JacobKrall And it's also trying to get you to use your Amex card over other cards you might have by making it (potentially) cheaper to use. Also, if your current rate is less than 13.99% + prime, it could be a sneaky way of raising your rate in a year. Of course if you don't carry a balance anywhere neither makes any difference. – blm Dec 23 '15 at 18:06
  • @blm: Thanks for the additional commentary. My current APR is already 13.99%+prime, so it can't be that. – Jacob Krall Dec 23 '15 at 20:07
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it is possible that if you do not accept the offer, they will try offering you an even lower rate. if they offered you close to 0%, you could start carrying a balance and find a better use for the cash you would have spent paying it off. there are plenty of investments with a guaranteed return of over 0%. personally, i am using a 0% offer from one of my cards to invest in the stock market. i might lose that bet, but on average over the last 10 years, i have not. a pretty safe bet would be paying down your mortgage, or buying a cd that matures when the offer ends. that said, even a 10k$ balance might only pay you around 300$. is that worth the hassle to you?

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This is brilliant for AmEx; they make a cut off of every transaction you do, so even if you pay it off before you ever pay interest, they still may take some. Balance transfers, on the other hand, generally have a transfer fee that locks in a percent, depending on the offer.

For your own sake, it can be a good deal if you

  1. Have evaluated your finances and know that the APR is decent for whatever urgency you can trade with the cost,
  2. do not get in the habit of borrowing money,
  3. pay off the balance before the spike in interest, and
  4. do not do something that could cost extra money, such as if they have an undocumented $100 fee for the service.

Considering that they make some money, it makes sense why they offer people this - merchants, as you'll read from Nerd Wallet, are paying extra to use credit cards.

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