Discover Cardmember Agreement Changes
Discover sent me a letter today detailing changes to my cardmember agreement.
The following changes will apply to Discover accounts effective for billing periods that end after October 1st, 2007.
Special Cash Advance Offers
In so many words, Discover may offer special APRs and introductory rates on cash advances, but if you fail to make a required payment on time, the special rate will end and a default rate will apply.
See universal default for an explanation.
Late Fees
The late fee is based on your balance as of the end of the billing period for which you did not make a payment. If the balance is $250 or less, the late fee is $19, if the balance is greater than $250, the late fee is $39.
You guessed it. It’s up about $4 depending on your balance.
Minimum Monthly Payment
If more than 90% of your “New Balance” consists of “special-rate balance transfers”, Discover may increase your minimum payment due to 4% of the “New Balance”.
That could result in a hefty minimum payment, especially if you execute a 0% APR balance transfer for say $5,000. The minimum payment under the new terms would be $200.
Discover does give you the option to not accept the new cardmember terms by writing a letter stating that you do not want the changes to apply to your account, so long as it is received by September, 25th, 2007.
However, failure to comply will result in a closed account, and if you use the credit card anytime after September 25th, 2007 the new changes will apply regardless.
I thought Congress was improving credit card terms.
Related Topics:
- Discover Offering $50 Cash Back Bonus
- Capital One to Lift Credit Card Interest Rates
- 0% APR Credit Cards
- American Express and Discover Receive Top Honors
- Credit Card Use Up in October
Posted Under: Credit News