Credit Card Annual Fees: Beginning or end of year?

[adk]

Well, I got a pretty enticing offer in the mail today. Continental Airlines sent me a letter today selling me a credit card (again), but this time it actually caught my eye. They're offering me 20,000 miles for signing up as well as 0% apr for six months. The only caveat is that there's an annual fee. Does anybody know if they charge this at the beginning of the year or the end of the year? Basically I'm hoping to get my miles and low introductory rate and then cancel before the year is up, assuming they tack on the annual fee at the end of the year.


Also, before anybody starts going on a diatribe about "spending money I don't have," and "debt, rah rah rah," please be aware of the fact that I DO have the money, it's just locked into a CD until june and certain situations have sprung up causing me to have to spend that money now.

 

[macdaddy121]

Also, before anybody starts going on a diatribe about "spending money I don't have," and "debt, rah rah rah," please be aware of the fact that I DO have the money, it's just locked into a CD until june and certain situations have sprung up causing me to have to spend that money now.

Then you don't have the money....

 

[adk]

Then you don't have the money....

I've already explained that I do have the money, I guess you just might not understand the concept of liquidity. I really wish I had something better to do than justify myself to strangers like you, but unfortunately I don't. So here goes. I NEED to spend money soon. If I don't fix the CV joints on my car soon they're going to get worse and end up costing four times as much to fix. I have three options to pay for this:

1. Take the early withdrawal penalty on my CD and lose something like $300 to get my money back early
2. Charge the repairs onto my current credit card (which I pay off every month) at prime plus 9% interest
3. Get a card with a 0% introductory rate and carry a balance until my CD matures.

Believe it or not, intelligent people are in fact able to use credit cards as financial tools instead of just falling into debt.

 

[rdowns]

Do you really think they'll give you 20,000 miles and 0% interest and allow you to cancel card before the annual fee is due? The fee will be on the first bill.

Is it a 0% APR for six months on new purchases or only on transferred balances?

 

[swiftaw]

The annual fee is added to your first bill and then every 12th bill after that.

 

[macdaddy121]

I've already explained that I do have the money, I guess you just might not understand the concept of liquidity. I really wish I had something better to do than justify myself to strangers like you, but unfortunately I don't. So here goes. I NEED to spend money soon. If I don't fix the CV joints on my car soon they're going to get worse and end up costing four times as much to fix. I have three options to pay for this:

1. Take the early withdrawal penalty on my CD and lose something like $300 to get my money back early
2. Charge the repairs onto my current credit card (which I pay off every month) at prime plus 9% interest
3. Get a card with a 0% introductory rate and carry a balance until my CD matures.

Believe it or not, intelligent people are in fact able to use credit cards as financial tools instead of just falling into debt.

I understand the concepts of liquidity and people being able to use credit cards for good rather than running up debt. However, to say that "you have the money" is a false statement. You obviously don't have the money or else you wouldn't be looking to get into a credit card and spend the money you currently don't have. I was merely pointing out that if you really had the money you would not be in this situation but maybe I was looking at "having the money" in a differnet way than you are.

But anyway, as stated already, the fee is applied during the first bill but I'm assuming you can push that back because of the 0% intrest, so it should not matter wether it is now or in 6 months. Then your CD will have matured and you can pay it off in full with no penalty. I guess the best thing to do is add the cost of the repairs plus the 9% intrest and compare it to the annual fee for the card with 0 intrest and the 20,000 miles. Then I would decide which ever one is best for the situation. It seems like the cost of the repairs would be fairly minimul and the 9% should not hit you that hard but I don't know the entire story. I would definently let the CD mature before withdrawing it and incurring the penalty.

Also, do you have anything you could cut out of your budget for the next several months to be able to make the payments in full? I know I find ways to waste money if I don't follow my budget very closely.

I understand you are in a difficult time and if the new credit card makes sense than get it. But yeah, they are going to hit you with that fee before you can get any type of reward from them. Good luck and I hope you figure everything out.

 

[macdaddy121]

Is it a 0% APR for six months on new purchases or only on transferred balances?

Good point, check the fine print and even give them a call and make sure. Also do some research for other cards that might be offering similar offers without a yearly fee. I know I have a card that had 0% for the first 12 months with no fee.

 

[swiftaw]

Plus, if you really need a 0% intro-APR credit card, there are some without annual fees, chase has some for example.