Disney Visa Ripoff

[cdavishb]

Chase Disney Visa has changed the way they apply payments to the "interest free --6 months" period. They apply your payments to the disney charges that would be "interest free" for the longest. BE AWARE!
I just spent 1hr on the phone with several reps from Chase Disney Visa. They know about it but say "higher ups" made that decision. There is nothing they can do.

 

[tawasdave]

I do not think this is a recent change...I ran into this within the first year that the card was issued, many years ago...

 

[kaligal]

People have been complaining about this since the thing started. It seems to often turn out that Chase is doing exactly what was outlined in the small print part of the agreement.

It always a good idea to read the small print. That's where they hide the "gotcha!" stuff.

 

[PictureJumpr]

I closed my Chase Disney Visa account when they came out with the Disney Visa debit cards (same points and privileges except for the interest-free financing on vacations and a few minor differences), mainly because I never charge vacations anyway and I rarely use credit cards in general. So it's been a while since I read through an agreement/T&C but it seems to me that most credit cards where part of your balance is interest free and the rest isn't, Disney Chase or otherwise, will apply your payments to the part that isn't earning interest before they apply anything to the interest-earning part - allowing them to maximize your interest owed.

It isn't nice, but it is legal and is the way most of these companies do business. 'Help' you pay off that loan they gave you free, before 'helping' you pay off the amount they loaned you with interest.

 

[LaurenT]

Sorry...but it's not just them. All cc's work this way. Anytime you accept a deal with a cc that involves a lower rate, either for the life of the balance or for a specific time, or an interest free period, you should then not use that card for anything else - because the new charges will become secondary...meaning you'll be charged interest on them until you start paying off that part of your card, which won't happen until the "special" deal is paid off!!
I do believe there is legislation in process that will change this, but better to be safe.
We have excellent credit and have been offered som great deals...I have several large balances on different Chase cards that I took out for home improvement...
I did this because the 3.99% worked out to be more cost effective than even if I took into account the tax benefits of a home equity loan. But I knew of this tactic going in and I put those cards in a lock box where they will not be accidently used, and I pay ON TIME monthly in an amount much larger than the minimum due...just as if I were paying off a car.

 

[Belle & Ariel]

I have also found that if you return anything and have a credit, it is applied against your "deferred charges". I check online before paying and deduct any credits on my future bill, because they will apply them to your 6 month balance.
I love the reward dollars, but the 6 month free financing is not what it is cracked up to be.

 

[maccagerl]

Sorry...but it's not just them. All cc's work this way. Anytime you accept a deal with a cc that involves a lower rate, either for the life of the balance or for a specific time, or an interest free period, you should then not use that card for anything else - because the new charges will become secondary...meaning you'll be charged interest on them until you start paying off that part of your card, which won't happen until the "special" deal is paid off!!

Actually, the HSBC Best Buy cc does not work this way. They separate the interest - free charges from the interest-accruing charges into separate boxes on your statement. When you make your payment, they allot the minimum payment that is due on your interest - free account to the interest free charges, then allot the rest of your payment to your interest-accrueing charges.

So, say my mimimum payment on an interest-free charge of $1000 is $10, and I've charged an additional $500 for which I am being charged interest.
If I send in a payment of $100, then they will put $10 to satisfy my minimum payment due on the interest free account, then put the rest of my payment, $90, towards the charges which are accruing interest.

 

[cdavishb]

No this is definately a change. I have been a card member since Day One. I always have watched my account and never paid one dime in interest.

The change affects how they apply your payment to your "interest free charges." If you use this card just for Disney Purchases (not other monthly purchases) and you have several purchases expiring at different times - One expiring in April, one in June and one in September, they will apply the payment to the one in September first. Therefore, you could be start being charged interest on the one coming up in April even though you made a payment enough to pay it off. They are hoping no one notices.

I told the customer service person if they wanted to do away with the program they should just end it. This is a deceitful way to really not be giving you 6 months "free interest."

 

[LaurenT]

Actually, the HSBC Best Buy cc does not work this way. They separate the interest - free charges from the interest-accruing charges into separate boxes on your statement. When you make your payment, they allot the minimum payment that is due on your interest - free account to the interest free charges, then allot the rest of your payment to your interest-accrueing charges.

So, say my mimimum payment on an interest-free charge of $1000 is $10, and I've charged an additional $500 for which I am being charged interest.
If I send in a payment of $100, then they will put $10 to satisfy my minimum payment due on the interest free account, then put the rest of my payment, $90, towards the charges which are accruing interest.

That is a much more ethical way of doing it, and I believe all cards will be similar in the near future due to newly passed legislation. I do not carry a balance on any card except those where I used the card as a loan (and those I do not touch for anything else)- even it's a large balance and I cringe when I see the total, I find a way to pay it off, too stressful not to...so, in your scenario, I would have to make a $510 payment to satisfy the $500 I charged and make the $10 minimum on the interest free portion (although I would feel funny just paying $10 toward it - if it's only 6 months interest free, at the end on the 6 months I'd only have $60 paid and would owe $940!!

 

[mlittig]

I love how Best Buy's billing statements clearly show all the interest on all their special financing specials

 

[doconeill]

There is definitely a change in progress - and it is with ALL credit cards. I've received several "change notifications" lately. I read them briefly, but I'm pretty sure that the new law requires that any payments in excess of the minimum be applied to the HIGHEST RATE BALANCE FIRST. I'm not sure how the minimum amount gets applied, but at least a good portion of that goes to your finance charge for that month.

It HAD been common practice to apply payments to the LOWER rate balances first - which meant your finance charges kept building while you were paying off that 0% vacation...

I believe this new provision was part of the law that took effect on February 22nd - so what the OP is saying should DEFINITELY NOT BE TRUE with the next bill.

 

[bumbershoot]

I'm not 100% sure if this is the same thing but there's a thread on the CB that talks about this. IN the last pages of the thread, there is discussion that this (I think it's the same issue) is actually an error on their part, and they are looking to fix it. Page 7 is here.




(ps, the disney debit isn't the same with points...$1 reward for every $200 you spend, which is, I believe, a fourth of the rewards you get with the CC...and there's a $25 annual fee...other than that it's the same, but just wanted to clarify since it wasn't totally true the way it was stated by a pp)

 

[radius]

This is why I hate credit cards. When I was younger I got caught up in this same deal. I only keep one credit card and its used only for rental car deposits and travel deposits. I try to pay cash for everything. I noticed ever since we started doing that instead of charging everything we feel less stressed.

 

[pooch]

Actually, the HSBC Best Buy cc does not work this way. They separate the interest - free charges from the interest-accruing charges into separate boxes on your statement. When you make your payment, they allot the minimum payment that is due on your interest - free account to the interest free charges, then allot the rest of your payment to your interest-accrueing charges.

So, say my mimimum payment on an interest-free charge of $1000 is $10, and I've charged an additional $500 for which I am being charged interest.
If I send in a payment of $100, then they will put $10 to satisfy my minimum payment due on the interest free account, then put the rest of my payment, $90, towards the charges which are accruing interest.

and this is the new CC law. You cannot pay "extra" on a non-interest bearing balance if you have an interest bearing balance tied to the same card UNTIL 60 days prior to the expiration of the deferral period. At that time, you can pay the balance as you choose. This applies to all credit cards as of 2/22/10 - federal law.

 

[hookedonears]

All cards are starting to do that. There's an easy way around it though. Pay off your car each month.

 

[kmk1180]

All cards are starting to do that. There's an easy way around it though. Pay off your car each month.

Exactly what I was thinking.

Then there's always the option of freedom of choice. Don't like it?,
Find another card you like better. But my guess will be there will be some kind of strings attached if your looking for "interest free"

 

[4greatboys]

No this is definately a change. I have been a card member since Day One. I always have watched my account and never paid one dime in interest.

The change affects how they apply your payment to your "interest free charges." If you use this card just for Disney Purchases (not other monthly purchases) and you have several purchases expiring at different times - One expiring in April, one in June and one in September, they will apply the payment to the one in September first. Therefore, you could be start being charged interest on the one coming up in April even though you made a payment enough to pay it off. They are hoping no one notices.

I told the customer service person if they wanted to do away with the program they should just end it. This is a deceitful way to really not be giving you 6 months "free interest."

I have been a member since Day 1 as well and this is not new. It has been this way since the beginning

 

[siskaren]

Well, I'm confused. I've also had the Disney Visa since day one, and when I book a Disney trip I make monthly payments and then each month I pay the total of my non-Disney balance plus an extra amount that's always been credited to the payment that's going to have the six month interest-free period end first.

 

[TillyMarigold]

I love how Best Buy's billing statements clearly show all the interest on all their special financing specials

Of course, after a year and a half of on-time payments on an interest-free balance, HSBC/Best Buy started moving my payment due date a week earlier every month so that after 3 months, the payment I'd scheduled to come out the same day every month (the day after the statement issued, when I first scheduled it--so when I scheduled it, the payment came out 3 weeks before the due date) suddenly was coming out the day before it was due and I had to put a rush fee on it, which canceled the interest-free rate.

Every card has its deceitful practices, and when the government closes one loophole, then they just take advantage of another.

 

[LaurenT]

Crredit Cards can be a great tool and even a money saver, but only if you take the time to understand exactly what the rules are and play by them perfectly. We have $35,000 left on over $60,000 we took as 3.99% for the life of the balance money we took out 3 years ago to do major imporovement to the house. Even with the economy, the house has appreciated more than the amount we now owe because of the improvements we made. If I had done a 30 yr home equity loan at 8% or so, we'd still owe alomst the entire amount as most of our payments would have gone to intererst.
But I do not add any charges ever to those cards, they exist purely for these loans we took. The regular monthly payments we make leaves our credit rating in trhe excellent category.
Then for my regular day to day expenses I have 2 cards, Amex which is the most profitable, and a mastercard for those places that do not accept amex. We charge everything we can to the amex, groceries, bill, gas...once we have charged $6,500, all charges after that accrue 5% money back, we pay our bill in full each month and actually make a profit on our cards.