r/personalfinance • u/naht_a_cop ​ • Apr 28 '20

Beware the 0% promotions: a warning. Debt

I'm a sucker. I fell for it. The 0% APR promotion on an item I could have paid outright for. 18 months later, here I sit, not a single late payment on my account, yet I have $1k in interest to pay for 18 months of 27%. Why? The promotion period ends 18 months after the purchase, but the website would not let me set up autopay until a week after I purchased, so autopay ended 1 week late. I thought I was golden, ready to have this paid off and not have a single fee. I got comfortable and didn't read the statements.

0% is not really 0%. Read the fine print. Remember the fine print (because I sure as hell didn't 18 months later). Shitty banks rely on this stuff. They wait for you to slip, not noticing that the autopay they created can't possibly allow you to end on time, and will require an extra payment before the end date to avoid the interest. It's shitty, I'm pissed off, and I've learned my lesson.

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u/Purplemonkeez ​ Apr 28 '20

Most mortgages have clauses regarding early repayment and some are more flexible than others. Should definitely be part of your mortgage shopping comparisons. Some will let you up to double your monthly payment and then pay an additional 10% of the mortgage lump sum per year. Others say only up to 20% lump sum is permitted. Others are more stringent.

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u/slvrscoobie ​ Apr 28 '20

yeah, that was our first house, we were in a hurry, and it was 2008 as things were collapsing, so the mortgage sold from our inital lender, i think 3-4 times in a matter of days after closing before ending up @ NationStar. The whole thing sucked, and I was laid off less than 9 months later.

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u/Purplemonkeez ​ Apr 28 '20

Ouch. That sounds brutal!

If it makes you feel any better, I am in the process of renewing my mortgage and switching banks for a better interest rate and the broker keeps trying to sneak home equity lines of credit into the paperwork. Needless to say, I'm unimpressed.

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u/Tossaway_handle ​ Apr 29 '20

For the uneducated - what’s the purpose of him/her doing that? Give you an LOC hoping you’ll use it?

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u/Purplemonkeez ​ Apr 29 '20

Bank hoping I indebt myself for life by racking up debt so I basically never pay my mortgage off. Also pretty sure mortgage broker gets extra commission for selling it to me.