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As a Chase customer, I’m pleasantly surprised by all of the recent website design improvements and higher quality credit cardholder offerings. So naturally, when I received an email offer from my Chase Freedom card to sign up for 0 percent interest on all purchases from Nov. 2018 to May 2019, I did not hesitate.
It was easy to sign up — just like the rotating category sign-up emails I get each quarter. All I was required to do was click the green button in the email to activate the Chase Freedom 0% APR offer.
Is there a catch to this offer?
When I first saw the email, my first thought was, “What’s the catch?”. In the past, in order to get a 0 percent interest offer, I had to open a new credit card. My Freedom card wasn’t new — I’ve had it for about five years. I figured this was something new that Chase was implementing for existing customers.
After reading the email in detail, I found out that there’s no catch. Chase simply wanted me to spend more on my card in the hopes that I’d rack up a big bill and not be able to pay it back before May. That’s definitely not going to happen.
If you’ve received a similar offer, these are three ways you can avoid falling into this trap, while still being able to fully take advantage of the Chase Freedom 0% APR offer.
What to splurge on?
As you can see from Chase’s email, they encourage you to make big purchases around home improvement, electronics, or trips. I realize using a credit card to make a big purchase is a slippery slope, so it’s crucial to always do a cost estimate beforehand — whether you’re using the card for a trip or a home improvement project.
Yup, Chase certainly knows my spending habits — I’m going to use the Chase Freedom 0% APR offer to fund a trip to Japan next year.
Not having to pay any interest gives me a bit of time to save up the cash I need to fully fund the trip. I don’t quite have all of the cash saved up at the moment.
My cost estimate includes flights, transportation, meals, and lodging. Then, I add 15-20 percent, mostly because you can’t always plan everything out.
After I have the estimate, I work in a little budgeting magic.
3 Ways to avoid getting stuck with debt
Understanding the costs involved with both the purchase and offer helps you know how much you need to spend and hopefully avoid mindlessly spending. For example, after the promotion is over in May, the APR will revert back to 15 percent for the remaining balance.
Let’s say I racked up a balance of $3,000 on the card and wasn’t able to pay it off by May. With that interest rate, I’d be looking at owing an extra $450.
By using the following three strategies, I plan on avoiding the interest by the cut off date.
1. Work backwards and have a payoff date.
The 6-month time frame for the Chase Freedom 0% interest gives me enough time to pay off the purchase and also earn the appropriate amount of points on the card. Score!
I’ve set the payoff date on my Google calendar so I don’t forget.
2. Calculate the cost of spending.
Going back to the cost estimate — Japan will cost me around $2,000 (not including the price of the roundtrip flight, which I already paid for with my Chase Sapphire Reserve using Chase Ultimate Rewards). If I add 20 percent on top of that, the total will be around $2,400.
3. Set a monthly payback amount.
The cost of Japan will be broken up into a monthly payment, beginning in March. My monthly payment will be around $800 for March, April, and May. Having this payment amount gives me an idea of how to handle the rest of my finances for those three months.
Bottom Line When Taking Advantage of the Chase Freedom 0% APR Offer
The Chase Freedom 0% offer was a nice surprise. It offers me more time to save up for Japan. Plus, I can use the card strategically to rack up points and avoid interest.
Taking advantage of an offer like this is only beneficial if you plan ahead for purchases. Have an end date for when to pay it back and enjoy.
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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.