Clarity Mastercard - 0%APR

[Nolcrest]

My husband received an offer today from Capital One for their Clarity Mastercard.

It is 0% APR always (not an introductory offer)
0% for balance transfers, cash advances.
0 fee for cash advances, late payment fees, over line of credit and balance transfer, and membership fee.

The minimum finance charge = "this fee is considered a Finance Charge" is $7.00 for every 1,000.00 of account balance.

So, a 5,000.00 balance would be a 35.00 monthly payment.

I have read the disclosure and can't find "the catch" other than the fact if you only paid that low monthly fee you may have this balance for a long time.

I am seriously thinking of transferring a balance from my 9% card to this and of course sending much more than the minimum required to pay off the balance. My other CC is at 2.5% and I never thought I'd see anything for lower than that.

How can Capital One offer this? It doesn't seem that they would make any money off of this.

Any thoughts on this offer? Am I missing something?

 

[jeanadave]

We got something like this too. It makes it a finance charge of .07% and, like you, I'm wondering what the catch is.

 

[Nolcrest]

Maybe I'm solving my own problem here:

Maybe that Minimum Finance Charge ( $7 for every 1,000) is on top of a Minimum payment.

It does say at the bottom "Minimum payment will be greater of 3% of outstanding balance or $10.

So if this is correct the minimum payment on 5,000 would be 150.00 plus the minimum finance charge of 35.00, totaling $185.00.

This no longer looks good to me if this is the case. I like my 2.5% card. Oh you gotta read the fine print. They are so slick.

This sounds more like it doesn't it? Anyone else familiar with this Clarity card?

 

[cruisnfamily]

I figure that to be an APR of 8.4% based on a balance of $1,000. I could be doing the math wrong.

I figured $7x12=$84 per year on a $1,000 balance which would equate to 8.4% wouldn't it? Not the zero they promise.

Somebody help me out with the math

 

[Mad4Dizne]

We are thinking of having one for emergencies and I couldn't find anything to beat that!!!

TIA!!!!

 

[disneysteve]

The info given doesn't make sense unless I'm missing something.

You say it is 0% on purchases and 0% on balance transfers and cash advances. If that's true, where does that finance charge come from and what balance would be subject to that. It can't be both 0% and have a finance charge as those two conditions are contradictory.

ETA: I just searched Capital One's site and can't find any reference to this card.

 

[jeanadave]

I just fished mine out of the trash (it actuallly came today) and found a little insert that I hadn't shredded. It says "Don't miss your chance! No Confusing Interest - Just $7 a month for every $1,000 of account balance. Call 1-866-346-7128, visit us online at www . my capitalonecard . com or reply by mail today!"

 

[disneysteve]

visit us online at www . my capitalonecard . com

That site requires a reservation code from the mailing to get any info.

So there IS interest which means it is NOT 0% at all.

 

[Cheshire Figment]

But it also probably says that the terms are subject to change at any time, and that if you are ever late for them or any other credit card issued by anybody they can then adjust the rate (way) upwards.

Also, it probably says $7.00 finance charge per $1,000 or fraction thereof. This means if your balance is $1,000.01 you will pay $14.00.

And as another poster said, if your balance holds at $1,000 you will pay $84 in fees for a year, which is 8.4%. However, if your average balance is only $500, then your interest rate is 16.8%. Not really such a good deal.

 

[jeanadave]

That's why I had to pick through my trash can! I'd already shredded mine up!

 

[Nolcrest]

You say it is 0% on purchases and 0% on balance transfers and cash advances. If that's true, where does that finance charge come from and what balance would be subject to that. It can't be both 0% and have a finance charge as those two conditions are contradictory.

You're right! I think this is a play on words. It took me quite some time to figure this promotion out. They are saying 0% interest but then give you the payment chart for the finance charge (which is 7 for every 1,000). Then in small print at the bottom it states the minimum payment is 3% of balance. So the monthly payment would actually be that finance charge plus 3% of the balance.

Call it a finance charge or call it an APR - you're not getting to use their money for $0.

This promotion can be very tricky if you don't take your time in reading it - several times.

The only good thing about this is that they don't seem to penalize you for late payment, over credit limit, or other activity on your credit report. They say you can also choose your payment date. None of this which would entice me as I have excellant credit and always pay on time.

Mystery solved

 

[disneysteve]

The only good thing about this is that they don't seem to penalize you for late payment, over credit limit, or other activity on your credit report.

Just because they don't charge a late fee doesn't mean they don't report you as late on your credit report.