Best Buy Credit Cards

May 28th, 2008

This is just an FYI for everyone. Best Buy often has deals where you can get no interest for 24 months on certain products. If you do not pay off the balance within that 24 months, ALL of the interest that would have accrued is tacked on to your existing balance. Here’s what they don’t tell you. You still have to make a payment every single month. Apparently you’re not responsible enough to pay off the balance in time, so they want to hold your hand.

Actually, that’s probably not it. They want to make more money. If you miss a payment you get charged a late fee. If you miss 2 payments, your no interest deal is canceled and you start accruing interest immediately. I’m not sure if you have to miss 2 in a row, or if you just have to miss 2 payments during a certain period of time. The only reason I know this is because I emailed them and asked. I’m sure it’s in the fine print, but who the hell really reads that?

Of course they don’t want you to pay off your balance within the 24 month period. They want you to accrue that interest, and on balances that big it is considerable. Here’s a scenario: the balance on my card is about $2k. My minimum monthly payment is $21. My interest free period is actually 36 months. $21×36 = $756. That is obviously not even half the total balance. So there’s no way one could possibly pay off the entire balance while making only the minimum payment.

That’s where they get a lot of people. It’s a rule that you’re never supposed to pay only the minimum. Apparently this not a well known rule. I suppose I could get by only paying $55ish a month. That would put my bill at $0 before the promotional interest free period ends. A lot of people don’t really think ahead in this situation. They figure they’ll make the minimum payment for a while, and then they’ll pay more when they have some extra cash lying around. This is a problem with credit cards in general, but Best Buy and HRS are capitalizing on it,and why wouldn’t they? I don’t think they’d have these offers if they didn’t dupe enough people to make it worth their while.

By the way, the normal APR is 20.4%. I don’t feel like doing the math, but it’s obviously a horrible rate. So if you’re in this situation, while it’s not necessarily a bad one, just keep in mind that you’re going to get superfucked if you miss those 2 payments.

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