Economics on the small scale

Friday, March 24, 2006

I'm usually the pays-bill-in-full type of deadbeat customer rather than the doesn't-pay deadbeat. But last month, I missed a payment. So my Credit Card company sent me this month's statement with this little love note:

We did not receive your payment by the payment due date. As a result, the promotional rate will no longer be in effect after the closing date show on this statement for Category A.

Category A is for Balance Transfers and Checks. I don't have another credit card to transfer a balance from, and the last time I used one of their checks was a dozen years ago. So I generally don't care what my Category A rate is, but this note was the first I'd heard of a promotional rate.

My Category A rate had been 18.24% (APR) last month, and they hadn't mentioned anything about a promotional rate. This month it's now 0.99%. Next month, it will presumably be back up to usurious levels.

So what exactly was the point here? Where they trying to scare me into making a balance transfer before the rate went back up?


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