Please tell me about the special "buy now, no interest for ..." deal with Visa

[maggiew]

I remember when we signed up for the Disney visa there was a perk where you had 6 months no interest on Disney Vacations if you paid for it with the Disney Visa.

Can someone explain how this works?

We have no balance on our card. But we use it like a check card. We put all our normal expenses on it and pay it off at the end of the month.

I remember reading somewhere where a person put his vacation on the card thinking it was interest free for 6 months. But he had a balance on the card, so when he paid money towards the card, somehow it was applied towards the vacation expense FIRST, then it pays off the other balance??? Or something like that.

So what will happen in our situation?
I want to put the Disney Cruise deposit on our card. I will pay it off in increments throughout the 6 months. But what if I charge our regular expenses on it too??

Example (I am just pulling numbers out of the air):
Cruise deposit : $1000
Monthly expenses: $2500

If I pay $2500 to pay off the monthly expenses plus $200 to pay towards some of the cruise will this work?? Will the remainder be interest free?

OR,

Will I be paying off the cruise and then also $1700 of the monthly expenses, leaving me with $800 to pay off of the monthly expenses, which will get charged with an interest fine.

Maggie

 

[mad4themouse]

With any credit card that you have that has charges on it with different interest rates (for example: cash advances vs. charges), the lower interest rate balance will be paid off first when you make a payment. So, if you charge your deposit for your cruise to the card and then charge your monthly expenses to the card, the first payment that you make on the card will be applied to the cruise deposit (at 0% APR) before anything is applied to the other charges (at whatever interest rate you have).

So, in your example, your $2700 payment would be applied as follows: $1000 to the cruise deposit & $1700 towards the $2500 in monthly expenses. You would still have a balance of $800 which will be acruing interest at whatever rate you have on the card. Plus, since Bank One uses two-cycle billing, you will pay that interest for 2 months.

 

[maggiew]

Thanks for the response. I thought that was going to be how it is.

I also feel kind of stupid because I don't know what 2 cycle billing is. But we usually don't carry a balance so I have never really paid much attention. Could you explain?

Maggie

 

[janie91]

I'm glad to know this! I called bank one and they explained it to me this way on promotional balance transfers and convience check but she told me the vacation deal was different. She said the only way to pay on your 0 percent vacation package was to pay more than your purchases. That the vacation package was the only thing set up this way. I'm really glad to know because I'm getting ready to pay our package balance. Thanks for the help!

 

[mad4themouse]

Most credit cards have a grace period that goes from the date of purchase until the bill is due. If you pay off the entire balance on your card by the due date, you pay no interest. However, if you only make a partial payment on the balance, you begin to pay interest at the end of the grace period. In addition, any new charges to the card no longer have the benefit of a grace period and interest begins to acrue from the date of purchase.

In two-cycle billing, you pay interest on the average daily balance for a two-month period instead of the ususal one-month. So, let's say you start Jan. with a zero balance on your Disney VISA. You make a big purchase on Jan. 5 and do not pay the balance in full when it comes due on Feb 1. When the March bill arrives, it will have interest charges based on the average daily balance back to Jan 5, including any new charges that you made during Feb.

Confusing? I think it was designed to be that way. My advise would be to use the Disney VISA to get that 6-month 0% APR on the cruise but use some other rewards credit card to make your everyday charges to.

 

[swilphil]

I'm a little confused. If I pay off my balance in full on all other purchases, can I wait 6 months to pay off the Disney vacation? I'll put about $1,500 per month on my card, and I can pay that off each month. Once I put a $3,000 vacation on my card, my monthly balance will be $4,500. Do I just subtract the $3000 each month for 6 months and that's what I pay? I don't want to have to pay any interest.

 

[maggiew]

I think from what mad4themouse said above, that any payment you make would go towards the VACATION first, then the remaining payment (if any) would begin to pay off your regular charges. So unless you pay off the whole amount, you will be paying interest on part/all of your regular charges depending on how much your payment was.

In my situation, I either have to go for the 0% for 6 months or work towards the reward dollars. I can't do both. I also have no other rewards credit card so I can't just switch to that one for 6 months. I don't think the 0% interest is that great a deal for me. I will just pay the required amount to hold the reservation and then make payments each month to pay it off. That way I can still earn rewards on the credit card.

Maggie

 

[janie91]

I've called bank one several times and spoke to different people each time. They all insist that the 0% disney vacation is the exception to the normal policy on lower interest being paid off first. They say that normally with balance transfers and other lower rate offers the payment goes to lower interest first but the disney vacation is not that way. Since it is one of the key "perks" for having the disney visa your vacation will stay at 0% for 6 billing cycles. The only way to pay on your vacation during this time is to overpay your purchases. According to eveyone I've spoke to there you can continue to earn rewards and pay off that balance without affecting your vacation package. I would like to hear from someone who has done this successfully.