Amazon Citi card promotional APR deal?

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Topic Author
28fe6
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Amazon Citi card promotional APR deal?

Post by 28fe6 »

When I check out at Amazon, they offer me to make 6 equal monthly payments at a low APR of about 6-7%, using my qualifying Citi card.

What I don't understand is how this scheme separates my normal card balance and the promotional balance: if I just pay my card off every month I won't get to take advantage of the promotional credit, and if I just make the minimum payment, my regular balance will not be paid off.

Has anyone used this offer? How did it work and were there other catches?
GreendaleCC
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Re: Amazon Citi card promotional APR deal?

Post by GreendaleCC »

If you’re looking for a way to carry lower rate debt on a card, why not find a card with 0% APR for 12- or 18-months?
MrJedi
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Re: Amazon Citi card promotional APR deal?

Post by MrJedi »

Credit card payments have ordering rules. After the minimum payment, payments get applied to highest rate first and the lower rates. So you would need to pay the minimum payment + the balance of the higher rate; this leaves the balance of the lower rate behind.

Note that you will lose the grace period if you do this.
Topic Author
28fe6
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Re: Amazon Citi card promotional APR deal?

Post by 28fe6 »

GreendaleCC wrote: Sun Oct 10, 2021 5:58 pm If you’re looking for a way to carry lower rate debt on a card, why not find a card with 0% APR for 12- or 18-months?
I would consider doing that but I already have a lot of cards and it's not worth getting another one just for a relatively small ($1000) ski equipment. But I am tight on cash right now and I would take advantage of 6mo financing. I used a similar Amazon offer to buy my cargo bike ($700) and it was nice.
drk
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Re: Amazon Citi card promotional APR deal?

Post by drk »

I recommend calling your card companies and asking for a promotional purchase APR. I've been able to get 0% for a year from Discover and Amex, and Citi's been good for 6-18 months.
hachiko
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Re: Amazon Citi card promotional APR deal?

Post by hachiko »

Just to put it in perspective because I agree that 7% looks so much nicer than 14%, a 7% difference in rate on $1,000 for 6 months is less than $35. Not worth the effort of trying to track different balances on a single card for 6 months.

The other option is just to use another card for your regular expenses for 6 months and just keep that $1,000 balance on your Citi card.

I'll let someone else channel suze orman.
Doctor Rhythm
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Re: Amazon Citi card promotional APR deal?

Post by Doctor Rhythm »

Not that I ever would, and not that I’m saying you should…

But why not pull $1000 from your emergency fund and pay for the skis in cash and then “cover” the deficit in your EF with your credit cards. This way, you avoid paying interest now by taking a very small risk that you’ll pay more interest later.
Topic Author
28fe6
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Re: Amazon Citi card promotional APR deal?

Post by 28fe6 »

The problem is that my EF is depleted, specifically because of using my EF to pay for things now in order to avoid financing them. In September I needed a new refrigerator for $1900, HO insurance and car insurance both hit, and I had about $2000 in car repairs. In retrospect I should have probably financed the refrigerator but I don't have a 0% interest card right now.

I know that means I maybe shouldn't be buying ski gears, but my choices are cut back 401k contributions, or don't ski this year, but I already bought my season pass in the spring so that would be a waste.
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Cheez-It Guy
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Re: Amazon Citi card promotional APR deal?

Post by Cheez-It Guy »

Since you already spent money on a ski expense, why does it automatically make sense to spend more money on something you currently cannot afford? This is a want, not a need. An option is to treat the season pass as a sunk cost and just move on. I don't suppose it can be sold or otherwise transferred to another party? This is how people get into a debt spiral. If you can't afford it, don't buy it. Sometimes, even if you CAN afford it, don't buy it.
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PescadorPete
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Re: Amazon Citi card promotional APR deal?

Post by PescadorPete »

28fe6 wrote: Mon Oct 11, 2021 10:18 pm The problem is that my EF is depleted, specifically because of using my EF to pay for things now in order to avoid financing them. In September I needed a new refrigerator for $1900, HO insurance and car insurance both hit, and I had about $2000 in car repairs. In retrospect I should have probably financed the refrigerator but I don't have a 0% interest card right now.

I know that means I maybe shouldn't be buying ski gears, but my choices are cut back 401k contributions, or don't ski this year, but I already bought my season pass in the spring so that would be a waste.
You have no emergency fund at this point. :shock:
You consider home and auto insurance emergency expenses. :?
You think your options include cutting back on your 401k contribution. :(
You came to this forum looking for an understanding of how to increase your debt. :oops:
Topic Author
28fe6
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Re: Amazon Citi card promotional APR deal?

Post by 28fe6 »

PescadorPete wrote: Tue Oct 12, 2021 1:38 pm

You have no emergency fund at this point. :shock:
Well, emergency funds are there to be used. Of course we have to decide what counts as an emergency expense. The situation now is that I used my emergency fund for a series of large expenses instead of financing them. If I had financed them, my emergency fund would be intact, although I would be paying some interest now. That might have been a mistake and I'm looking for options to rectify it.
You consider home and auto insurance emergency expenses. :?
No, but they do deplete my cash-flow. I generally pay them out of my cash reserves...I don't have specific funds for these yearly expenses. It's not the insurance payments by themselves that put me into a crunch. It's a combination of quite a few things this quarter.
You think your options include cutting back on your 401k contribution. :(
Of course. We could all, always, decide to save more. Right up to the point of saving everything and spending nothing. So cutting back 401k contributions is one option for me to free up cash flow.
You came to this forum looking for an understanding of how to increase your debt. :oops:
Yes, the best way to increase my debt.
drk
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Re: Amazon Citi card promotional APR deal?

Post by drk »

28fe6 wrote: Mon Oct 11, 2021 10:18 pm I know that means I maybe definitely shouldn't be buying ski gears, but my choices are cut back 401k contributions, or don't ski this year, but I already bought my season pass in the spring so that would be a waste.
Sorry, but the original sentence was incorrect. If you're in a situation where new debt at 6-7% is appealing, you should cut back 401k contributions in order to pay off your existing debt and re-fund your EF.

For the ski pass, many resort companies are allowing people to defer their passes and apply the price paid to next year's pass. Maybe yours is one of them. At the very least, consider renting gear.
Topic Author
28fe6
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Re: Amazon Citi card promotional APR deal?

Post by 28fe6 »

drk wrote: Tue Oct 12, 2021 1:57 pm If you're in a situation where new debt at 6-7% is appealing, you should cut back 401k contributions in order to pay off your existing debt and re-fund your EF.
My marginal tax rate is 22%. So, technically wouldn't it be better take on low-interest, short-term debt than to cut back 401k contributions? Does it really make sense to forego the tax deferral? I can pay off the debt in a few months, but I can never go back and re-make the 401k contributions.
For the ski pass, many resort companies are allowing people to defer their passes and apply the price paid to next year's pass. Maybe yours is one of them. At the very least, consider renting gear.
I'm already going to rent gear when it makes sense and buy gear from a ski swap to save money.
drk
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Re: Amazon Citi card promotional APR deal?

Post by drk »

28fe6 wrote: Tue Oct 12, 2021 6:30 pm My marginal tax rate is 22%. So, technically wouldn't it be better take on low-interest, short-term debt than to cut back 401k contributions? Does it really make sense to forego the tax deferral? I can pay off the debt in a few months, but I can never go back and re-make the 401k contributions.
Maybe. Are you maxing your 401k? Would you still be able to contribute enough for an employer match? Do you max your IRA? Do you expect to withdraw/convert your pre-tax accounts in a lower tax bracket?

What do you consider low-interest? Don't get me wrong: I'm happy to take 0% APR offers on credit cards, but I wouldn't even consider 6-7%. That's one heck of a bogey for your investments to overcome.
28fe6 wrote: Tue Oct 12, 2021 6:30 pm I'm already going to rent gear when it makes sense and buy gear from a ski swap to save money.
Great!
bigtizzle
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Re: Amazon Citi card promotional APR deal?

Post by bigtizzle »

I have an Amazon card through Chase (so no guarantee it works the same with Citi).

On my monthly statements, alongside my total balance and the minimum payment due, there’s a separate “interest-saving payment” amount which combines my balances for regular purchases and the installments for things using promotional finance.
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