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Right now I'm using the Chase Freedom card, and the terms say that it has a 0% Intro APR for 15 months from account opening on purchases. After the intro period, a variable APR of 15.74% - 24.49% is applied. The same sort of thing applies to balance transfers as well.

I just started using the card last month and I've since been paying off the balance in full and I plan to continue doing this. When the intro period expires is it possible to negotiate with the bank to keep these APRs at 0% if I can prove that I've been a responsible cardholder for the previous 15 months?

  • 40
    You're really mis-using the 0% interest rate. As quid says, if you pay any card by the due date, you get 0% interest on purchases. (FWIW: in the 30-some years I've used cards, I've paid interest exactly once, when I was in the UK in the days before on-line banking, and there was a postal strike.) The proper way to use it is to pay only the minimum for 14 months, keeping the money you would have paid invested. Then pay it all off (or do a balance transfer to another 0% card). With reasonable luck your investment will have appreciated, leaving you with a profit :-) – jamesqf May 2 '17 at 4:16
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    Just make sure not to forget to pay in full after 14 months or, with the interest rates they charge, you'll lose your profit and more instantaneously. – laurent May 2 '17 at 12:07
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    @jamesqf Did you mean to say "misunderstanding" instead of "mis-using"? The OP isn't "using" the interest rate, and so can't be misusing it. But they certainly don't understand what the interested rate does. – forgivenson May 2 '17 at 12:10
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    0% Intro rates are bait to spend more, not a reward for your fiscal prudence. As @jamesqf has mentioned, just keep paying it off every month and it doesn't matter how high your rate is. – RonJohn May 2 '17 at 14:05
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    @forgivenson: I did mean mis-using, since (if I understood correctly) the OP thinks he's using the 15 month 0% interest rate, when by paying in full every month, he's still on the normal no-interest period. I think mis-using conveys my sense a bit better, but either word would work. – jamesqf May 2 '17 at 17:45
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If you pay your statement balance in full before the due date you will never pay a cent in interest no matter what your interest rate is.* In fact, I don't even know what my interest rates are.

Credit card companies offer this sort of thing in the hopes you will spend more than you can afford to pay completely in those first 15 months.

* Unless you use a cash advance, with those you will accrue interest immediately upon receiving the cash sometimes with an additional fee on top.

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Banks do not profit by your fiscal prudence

Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this.

In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing "fine print" trickery that would let them recover costs other ways.

However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent.

The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting "subsidized" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent.

Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it.

Nobody offers 0% interest otherwise - they'd lose if they did

By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it.

In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults.


The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor.

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    Downvoter please help me write better answers. – Harper - Reinstate Monica May 2 '17 at 17:50
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    There is some profit to be made in extending credit/financial services to prudent, wealthy individuals. The merchant fee may be small, but one person spending 100k/year and always paying off their debt is generating a tidy amount of merchant fees, and is relatively low risk. This even reaches the point that banks start offering them kickbacks on their merchant fees and random benefits to compete for them. Your answer acts as if these people are not worth keeping as customers. They may not be as profitable as someone who spends 100k and carries a balance, but money is money. – Yakk May 2 '17 at 18:51
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    I'm a pretty cynical person, but when I read an answer that starts referring to 'NYC skyscrapers' and 'the proletariat', I have to shake my head. There is a difference between advising caution when using credit cards that have deceivingly low rates (which you have done well, and I think is a good thing to caution) and advising against '"gotta spend it all" consumerism' (which I find distasteful). Further, note the discrepancy in your answer: first, you say that a CC company should be happy with the merchant fees, but then you say that a Suze Orman makes them no money at all. Which is it? – Grade 'Eh' Bacon May 2 '17 at 19:27
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    @Yakk, I agree and I'd even argue that the prudent, reliable credit users are actually more profitable because the bank spends $0 on collection agencies and never actually loses money to noncollectable debt. In addition to merchant fee sharing the bank has a wealth of transaction data to sell as well. – quid May 2 '17 at 19:28
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    I don't find this answer helpful in answering the question above. Seems more like a blog post or rant. – Joe May 2 '17 at 20:02
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For just one credit card

No. There is no incentive for the card issuer to permanently loan you money for free (Even though they make a small amount of money with every transaction).

For several credit cards over time

Yes, there are many credit cards that offer introductory 0% APR, often lasting for a year, some even two years. In theory, you could keep applying for new cards with these terms, and continually transfer the balance to the new card (Though you would probably incur a fee for doing so).

  • Continually opening new lines of credit negatively affects your credit score, at least in the US, so you have to be careful not to do this too often. – jpaugh May 3 '17 at 16:31
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Banks don't care that you are responsible cardholder. They care to make money.

Interest rates are basically 0% by government policy and the banks charge their responsible cardholders 20% interest rates. Think about that for one second, and realize they really do not care about your ability to avoid paying interest, they only need you to 'slip up' one month during your entire lifetime to make a profit from you. It is in their interest for you to get into a spending habit, from 0% promo rates, so that eventually a frivolous purchase or life changing event causes a balance to stay on the card for over one month.

  • "they only need you to 'slip up' one month [...] to make a profit" You are asserting that they have no operating costs for offering you credit. In fact, as long as you don't slip up, they're operating your account at a (perhaps small) loss, and may not ever recoup the costs, at least not from you. – jpaugh May 3 '17 at 16:36
  • @jpaugh which is also true on the loans they issue at 3%, shrug. – CQM May 3 '17 at 17:36
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No. The intro rate is a gambit by the bank - they accept losing money in the short term but expect to gain money in the long term when your intro is over and you (hopefully) start paying interest. There's not much in it for them if you never get around to paying interest.

Same can be said for people who close the card after their intro period, but that's different - the bank is correctly expecting that most people won't bother.

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