Tag Archives: credit card

Pottery Barn claims to reward but actually reaps 19% interest

24 May

Pottery Barn Rewards Credit Card

Notice the two words with the largest font in the above advertisement: reward and benefits. The Pottery Barn Credit Card totes numerous perks including no annual fee (I would hope not), special offers (junk mail & spam), online account management (yippee, another login…who doesn’t have this nowadays?!), and the ability to use your “rewards” credit cards at all Pottery Barn outlets (store, online, catalog…well duh).  So what they’re saying is the benefits are not beneficial at all.

But what about the 12 months special financing OR the 10% back in rewards. Notice the word with the smallest font. This tiny little “or” is critical in clarifying that the two most significant rewards are actually an option between them and not both included. It’s a classic example of the ol’ strategic font size marketing gimmick. With that highlighted, let’s dive into these two reward options.

To begin, in order to benefit from the 12 months special financing, your first purchase must be at least $750. The special financing rate is 0% APR, if and only if, the entire balance is paid off within that initial 12 month period. If not (brace yourself), interest is charged on the account from the purchase date at the standard variable APR (19% or 22.8%, depending on credit worthiness). So even if you paid off all but one dollar of the initial purchase within 12 months, you would automatically be charged at least $156.89 in interest (assuming a $750 purchase at 19% over 12 months). That initial $750 purchase now costs more than $900. That’s a hefty penalty for not meeting the payment expectations.

Let’s discuss the other option, 10% back in rewards. The first important factor is rewards are only earned on purchases that are greater than $250. Not a $100 purchase nor a $200 purchase, but only $250+ purchases. Second, the rewards certificate is only redeemable at PB outlets; makes sense. But when the rewards certificate is used, if the purchase total is more than the value of the certificate, the remaining purchase balance must be payed with by using the PB Credit Card. It’s amazing this requirement is even legal. This means a customer would not be permitted to pay the remaining balance in dollars (a.k.a. US legal tender). It’s a clever way to perpetuate the use of their credit card. Finally, if the purchase is less than the certificate amount, of course, the balance of the certificate is forfeited.

So the former benefit, if paid off within the initial 12 month time period, is basically just a way to (for free) avoid paying for something up front. And the latter, if over $250 is spent on a purchase and a number of hoops are jumped through, could potentially earn 10% more PB merchandise, because who doesn’t need more PB crap. None of this seems rewarding.

 

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BofA boasts cash rewards of 3%, yet they cash in at 18.99%

11 Jan

“Cash in on life’s essentials” implores the envelop even before the offer is opened.

On their Cash Reward’s Visa credit card, Bank of America generously offers 1% cash back everywhere, 2% cash back at grocery stores and 3% cash back at gas stations. Best part, there is no annual fee.

But this stellar offer is only applicable on the first $1,500 spent per quarter. So if you spend $1,500 on just gas in a quarter, you’d receive $45 back. That’s the maximum cash reward that can be earned in a three-month span. Sounds like a lot of work for a mere $45 every 90 days, assuming only gas is bought on the card.

However, if you carry a $1,000 revolving balance on the card generating interest at the Cash Rewards Visa’s lowest interest rate of 18.99% for that same 90-day period, you’d pay $48 in interest, accounting for the daily periodic rate and compounding interest. When the average credit card debt for a credit card holder in the U.S. is $5,047, it’s not unreasonable to assuming $1,000 revolving balance in this scenario.

The point is very few will cash in on such reward cards. In fact, the credit card companies expect many people to never break even on these offers, allowing them to dish out diminutive cash rewards to the few who can manage paying off their balance monthly. While the only one who is truly cashing in on this scenarios is Bank of America CEO, Brian Moynihan, who received a $12.1 million pay package in 2012 (and all the other BofA execs).

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Baldwin replies to Capital One post, defends spokesmanship

31 Dec

Baldwin responds to Capital One post and defends spokesmanship

Or at least someone responded from Alec Baldwin’s foundation. Yes, I think it’s commendable that Alec Baldwin has a foundation that supports “the arts and artists, amateur and professional”. However, as I stated in my reply to the pictured tweet, Capital One is making way more than $11 million on their Venture accounts, and that is money that should be in the pockets of American families and not those of overpaid bank CEO’s. In fact, MSN money deemed Capital One’s CEO, Richard Fairbanks, the most overpaid bank CEO of 2012.