I am horrified--they want to know what I am going to do with the money!
by
Scott Bilker |
Dear
Scott,
I love your website and have passed the good word to others where I
work. I play the zero percent game every year and never ran into
this one. Yesterday, I did a balance transfer at zero percent to pay
down my house.
They gave me $20,000, which I will
pay back in a year. I was horrified that they asked me what I was
going to do with the money. I felt that they did not trust me, and I
always pay them back every year before the zero-percent rate goes
up. They never asked me this before with the same amounts every
year.
I had to say something but did not
lead on that I was using it to go debt free and pay down the house,
so I had to come up with something fast or else I would be denied
the balance transfer. I told them I needed the cash to buy my
neighbor's boat.
Scott, I have a great credit score,
and I never pay a dime of interest to them in the past. The credit
card company even let me open six cards with them and even let me
transfer available credit to a new zero percent card. Why all of a
sudden do they want to know what I am doing with the money?
Greg
Greg,
Thank you for your kind words about
my website and work!
I know what you mean about the
"zero-percent game," but I do prefer to call that being DebtSmart. Calling it a game implies that we are taking advantage of
the system in a negative way, and that is certainly not the case. How
about we call it the "zero-percent strategy"...ooooh, I
like that!
The "zero-percent
strategy," for those that may not know, is continuously
transferring your balance to zero-percent, usually short-term,
deals from existing credit cards (or new accounts). This technique
can save you a bundle!
It is very interesting that they
asked what you want to do with the money. I have never heard of that
happening before! In all my years of transferring balances, and I do
this all the time between my 80+ accounts, I have never been asked
what I plan to do with the money. What difference would it make?
They want you to borrow the money, so why should they be asking?
I don't really have a specific answer
to your questions but can only speculate:
| 1) |
Maybe it's not the
policy, but a rep was just curious (although that is most
improbable). |
| 2) |
The bank may be collecting data about customers so
they can send letters to market their transfers based on what people
use the money for. |
| 3) |
They actually want to make sure that the money
is used for a "good" purpose. However, I doubt this is the
case because they just want to make money, and since your credit
score is good, they know a profit from you is in their future. |
| 4) |
They want to stop people from constantly transferring their balances,
but I doubt this too. Banks want to encourage transfers in the hope
that they collect interest charges from the lazy who don't stay on
top of their debt management. |
Most likely, it's case #2--data
collection for marketing, but that's just my guess.
Talk to you later.
Regards,
Scott
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