Ad in the paper this morning...0% APR until December 31, 2011 with the Citi Diamond Prefered Card on purchases at gas stations, supermarkets & drugstores. New Cardmembers only. Apply by 9/15/06 1-800-479-1183.
If you get this card, you could just use it for gas stations, supermarkets & drugstores...pay off the minimum each month...and put an amount equal to your purchases in a Money Market account...so it would be like getting a 5 year 0% balance transfer with no fees.
sloth911 said: WOW Yeah - that sounds great. 5% Cash Back is all well and good, but you'd earn 5% on that money in a savings account if you didn't pay it back for 1 year. 5 years would be great! Taxes and minimum payments would reduce this benefit some, but I'm pretty sure this would be a better deal than the 5% Cash Back cards.
Of course there's the chance that you might slip up and use the card at a merchant that doesn't qualify as a gas station/supermarket/drugst0re. You'll be paying 10%+ interest on that purchase for 5 yrs unless you pay off the card entirely and start all over, since any payments you make are applied to the 0% balance before they are applied toward paying down the higher APR balances.
And sometimes, you think you're at a qualifying gas station/supermarket/drugst0re but it turns out the credit card doesn't treat the purchase as such, and you wind up in the same predicament.
mapen said: Of course there's the chance that you might slip up and use the card at a merchant that doesn't qualify as a gas station/supermarket/drugst0re. You'll be paying 10%+ interest on that purchase for 5 yrs unless you pay off the card entirely and start all over, since any payments you make are applied to the 0% balance before they are applied toward paying down the higher APR balances.
And sometimes, you think you're at a qualifying gas station/supermarket/drugst0re but it turns out the credit card doesn't treat the purchase as such, and you wind up in the same predicament.
AlexTheMan said: mapen said: Of course there's the chance that you might slip up and use the card at a merchant that doesn't qualify as a gas station/supermarket/drugst0re. You'll be paying 10%+ interest on that purchase for 5 yrs unless you pay off the card entirely and start all over, since any payments you make are applied to the 0% balance before they are applied toward paying down the higher APR balances.
And sometimes, you think you're at a qualifying gas station/supermarket/drugst0re but it turns out the credit card doesn't treat the purchase as such, and you wind up in the same predicament.
Exactly, seems to be a very risky offer..
So you pay off everything with cash in your savings account and start over again... what's the problem? Still better than nothing.
CrazyRus said: But you're already hit with interest..Well, it's not so bad. The interest will not be on the entire balance - it will only be on the non qualifying purchase. So if you have, say, a $5000 balance at 0% and you slip up and make a $20 non-qualifying purchase, you will only have to pay the 13% or 18% interest on the $20. Then you can do what RushNRocket said - pay it all off and start again. Or do the math and decide whether the cost of the interest is offset by the benefit of having the 0% balance.
fat419 said: who cares what the APR is, don't carry a balance.
You are missing the entire point of 0% APR offers if you don't carry a balance!!!! The problem with the offer is that not quailifying purchases are charged the standard APR and ANY missed credit card payment can be used to up the 0% APR to your standard rate.
If you don't want the 0% APR - this is offer is worth almost NOTHING.
BTW I scanned the ad and posted a link to it above.
Neidman
Member
posted: Jul. 8, 2006 @ 9:44a
This was in the "Sunday coupon" section of the Oneida,NY Daily Dispatch which is distributed with the Saturday paper since they don't publish on Sunday.
No code was given so apparently none is needed.
Nothing about CashBack so apparently this is instead of the 5% CashBack.
No annual fee.
Also includes 0% balance transfer till 8/1/07 "no balance transfer fees with this offer"...regular balance transfer fee is 3% up to $75 max.
cameron2003
Senior Member - 2K
posted: Jul. 8, 2006 @ 9:49a
This offer, though interesting and unique, doesn't seem worth doing. I would rather have 5% CashBack. It would take a long time to spend enough in grocery stores to make deposits worthwhile. With this plan, what, every time I spend $100 at a grocery store, I need to remember to deposit $100 into an interest bearing account. I supposed you could make more than 5%, but hassle factor must be considered.
defjukie said: You'd have to get a pretty decent credit line, to make this work. 5 years' worth of groceries + gas can add up to quite a lot.
For a family of 2 w/ 2 people driving to work this is an EASY way to get an interest free loan on several hundred dollars per month until the offer ends.
Buy you do loose the 5% rewards on those purchases you could normally get.
LH2004
Frivolous Member
posted: Jul. 8, 2006 @ 10:22a
This is fascinating. I've always wondered why card issuers didn't do more to take advantage of the "pay off lower-interest balances first" rules -- though I pictured something more designed for those who regularly carried balances, like 3% on groceries, 5% on restaurants, 0% on all purchases over $1000, etc.
Has anyone ever heard of a card that charged different interest rates on different purchase categories?
since you can buy everything at supermarkets, from home depot over american airlines all the way to outback certificates - this is 5 years worth of interest free money to me....awesome deal, thanks OP1
89transam
Broke Member
posted: Jul. 8, 2006 @ 11:17a
$100 a month in gas $250 Groceries
$350 a month on the card.
Put that $350 into some interest bearing account (@ 5%)
24,368.03 in your account 21,000.00 on your card ------------------------ $3368 in interest in 5 years.
Sounds good to me, seems like others said though, you would need a pretty decent credit line to make it worthwhile.
Ah, but because it is incrfemental purchase and not a balance transfer, you have 5 years to accumulate the credit line. Should be relatively easy to get $25,000 for anyone with decent FICO/income.
cameron2003
Senior Member - 2K
posted: Jul. 8, 2006 @ 11:30a
But the 5% is taxable. CashBack isn't. I would rather have CashBack, and just get new 0% cards every year, which isnt that hard.
andy2812
Member
posted: Jul. 8, 2006 @ 11:31a
This seems like a very good deal if you're diciplined enough to only use the card on qualifying purchases. By putting the money in a 5% account, without taking compounding into account, you're basically earning 5% on the money every year until you pay it off in 2011. That comes out to 20%-25% until you pay it off on any charges made this year. With the current 5% cards, you earn 5% this year and that's it. Seems like a no brainer to me.
slimcustomer
Senior Member - 1K
posted: Jul. 8, 2006 @ 12:04p
For those with large supermarket, gas, and/or Drugstore expenses, this deal is nothing less than smoking hot. There is no guarantee that 0% credit card offers will be as common 2-3 years in the future when this 0% offer will still be going strong. There is no guarantee that 5% rewards cards will be here in 2-3 years as well, particularly in light of the scaling back of these offers by Chase and Citi in recent months. Plus, as already has been mentioned, you can purchase gift cards to a whole variety of other retailers at supermarkets. This effectively extends 5+ years of 0% financing to many other purchase categories. I think buying Home Depot cards at supermarkets to finance cost saving energy efficient home improvements through this deal would be particularly attractive.
km
Cranky Member
posted: Jul. 8, 2006 @ 12:06p
Holy mother of God!
Now this is a deal!!!!
Ways to maximize.....link this card to Upromise....do Walgreens FAR deals and have the rebates put on a Walgreens card where they GIVE YOU 10% more. Then you can use the accumulated amount to buy gift cards to other stores/restaurants.
Anybody know if this Citi card can be linked to Thank You rewards?
Great post OP!
asharerin
Senior Member
posted: Jul. 8, 2006 @ 12:14p
Supermarket chains and rite aid/walgreen drugstores also offer a bunch of giftcards to many different types of businesses and services (phone service, restaurants, best buy gift cards, home depot giftcards etc etc) you can purchase. This means you can get 0% for 5 years for much more than just gas stations, supermarkets or drugstores.
If you are afraid a place will not qualify as a gas, Drugstore or supermarket purchase for this deal it is a very simple matter of making a test purchase where you will use this card and see after your first month if you are tagged with interest.
Hot, hot, hot. No risk at all.
jlgrandam
Addicted Member
posted: Jul. 8, 2006 @ 12:27p
Great offer. I'm worried that interest rates might not stay above 5% for the next 5 years and as pointed out above, is taxable.
Spend $1000, get $50 back + 5% interest on the $50 = $50+
With this deal:
Spend $1000, get 5% interest on $1000 = $50 - 25% tax = $38.50/yr for 5 years
This deal will pay off in year 2, ok I get it.
asharerin
Senior Member
posted: Jul. 8, 2006 @ 12:38p
jlgrandam said: Great offer. I'm worried that interest rates might not stay above 5% for the next 5 years and as pointed out above, is taxable.
Interest rates may not stay above 5% every month for the next 5 years but it is a pretty good bet your average rate over the next 60 months is going to be just over 5% (well that is what the market has priced in right now). Hopefully the Fed has lost control of inflation and you could enjoy 6-7%!
any online link to apply for it or can current diamond members switch to it?
slimcustomer
Senior Member - 1K
posted: Jul. 8, 2006 @ 1:05p
After running the numbers, this deal is worth over $8,000 in interest income to my family over 5+ years if interest rates average 5%. I'll be reallocating credit to this line over time for sure and will probably need his and her cards to maximize this deal.
EDIT: When you adjust for minimum payments, the take before taxes is probably closer to $5,000. That compares to about $3,000 I would garner if I received 5% Cash Back on my purchases. You could come out even further ahead, however, since currently you can lock in rates of 6-6.5% apy if you put a portion of your cash flow into fixed rate cds. If interest rates were to fall significantly, 5% Cash Back would become more attractive.
slimcustomer said: After running the numbers, this deal is worth over $8,000 in interest income to my family over 5+ years if interest rates average 5%. I'll be reallocating credit to this line over time for sure and will probably need his and her cards to maximize this deal.
Can you share your numbers/calculations with us?
radheykrishna
Senior Member
posted: Jul. 8, 2006 @ 1:38p
Is this deal only fro people applying now or also for existing cutomers.
DaloSony
Senior Member
posted: Jul. 8, 2006 @ 1:42p
The deal is definitely worth it when compared to the $100 Gift card if you're very careful on qualified purchases. However, one have to estimate on how much qualified purchases they going to spend over they 5 years period and note that the purchases are continously. Therefore the calculation on average 5% interest rate is not fully 5%.
Once the BT is over on 8/1/07 and when making payment to this card, does the payment goes to the BT or purchases since both of them are at 0% APR. Please note that there are 2 purchase rate one at 0% APR and other at normal rate.
diddlydudette
Member
posted: Jul. 8, 2006 @ 1:46p
Ok, how do you apply for this particular card? Is there some site online to read about it. I'd be interested. Thanks!
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