Other LanguagesI confess: I have credit card debt. If you’re like me, you’ve likely found that as soon as you pay down one card you need to use it to buy something else. Due to recent changes in laws regulating credit card companies, many card issuers are raising interest rates and fees for consumers with good credit. At the same time, banks have rolled out new cards including one with an interest-free feature for certain purchases and another with simple, stripped-down rules.
Chase’s new "Blueprint" program, described in the USA Today story, allows consumers to avoid paying interest on everyday purchases, such as groceries or gas, even if they carry a balance and pay interest on other catgories. Borrowers get to keep an interest-free grace period for everyday items as long as they choose those categories in advance and pay them in full each month. You can even pick salon visits or health club fees as your “everyday” purchases.
Interest accrues on those categories at the start of the next billing period – so watch out. And card holders are still charged interest on other items they purchase.
Another Blueprint feature allows the cardholder to set up an installment plan, similar to a loan, to pay off pricier items.
So how does this save you money? It depends on how much of your interest in based on new purchases.
As Reuters explains, “Best strategy? Put all of your categories on that list. In a worst case scenario, you would not be able to pay them all off at once, and Chase will go back and charge you interest on the amount you didn't pay. That's no worse than simply charging them without a grace period in the first place.”
The federal bloggers at GovGab think it’s a good idea. But comments from WalletPop.com readers suggest that the new program may simply be a way for the credit card company to encourage consumers who carry large balances at low rates to start using those cards for other purchases.
Bank of America’s new Americard promises to not slap you with a fee for going over your limit or gouge you with punitive interest rates. Sounds simple, but the card's interest rate is variable – prime plus 14 percent. That’s too pricey for me and probably for anyone else with a decent credit score.
Talk About It: What do you think of the new features?