The Variable APR On This Macy's Credit Card Is Either 23% Or 716%
Rick writes: Check out the first bill I received for a Macy's card I just opened last week (because they offered me 20% off if I did). 716% APR has to be some kind of record. Even loan sharks couldn't charge that with a straight face.
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Yep, minimum finance charge.
That $5 minimum scares me, hopefully the OP pays in full.
It looks like its because the statement date is the same date as the charges, and there is a minimum charge. The 716% is an annualized amount, thrown off because it is annualizing $2 interest each day over a year.
Heh, according to the cnn calculator with a $5 minimum and 716% APR.
Error:
You chose to make minimum payments only. The amount of your payments is not enough to ever pay off your credit card debts. Please adjust your entries.
@wcnghj: Right-it would only apply each month, but since they're partway through a billing cycle, their computer seems to think it will hit more frequently-say, every two weeks or week or whatever.
@wcnghj: Of course really its $2 to interest and $3 to principle each month. So just 35 months to go!
Just don't look at your account online. They'll have already figured the uncharged finance charge into your balance as a 'convenience'.
@chiieddy: With all the convenience that companies are providing me, pretty soon the most convenient way to deal with life will be to end it.
Funny this is posted as I was planning to send my Macy's statement in too. I have a Macy's account I use ONLY when they are throwing me a big discount to use it (rare). I also pay the bill in full the moment it arrives.
That said, I noticed when I just got my statement a similar 700% rate and a week prior got a long legal notice from Macy's about how they were raising interest rates on my account, WAY up. Since I always pay it off, I just shook my head.
Yes, Macy's has been up to sneaky stuff with their credit cards lately. I suspect since sales are down in their stores they are trying to screw their credit card customers to make some extra cash.
@wcnghj:
The $2 would apply each month, but since the charge was on April 15th, and the statement closed on April 15th, the system is calculating the annualized rate based on 1 day. I'm not sure HOW, as I come up with 1065% rather than 716%
$2 / $103.70 = 1.9286% for that ONE DAY. Annualize that over 365 days is 1065%. I think that Macy's must be including the $5 minimum payment payment into their calculation to lower it to 716%. I would imagine that the NEXT months statement (if not paid in full) would show a more accurate number.
@PLATTWORX: You do know the card isn't issued by Macys, right?
Some outside company is getting most of that intrest.
Make sure when you're setting your online bill payment that the payment goes to Macy's and not Visa. You have to add your actual Macy's account number which is different from the number on your card. The Macy's card is also annoying because it adds the $2 finance charge automatically for your convenience.
@perruptor: Oh, THAT'S what the extra $2 are for. I paid my bill online because I was afraid it would get there late, and they charged the $2 extra, then gave it back to me as a credit to my Macy's account. I'm not doing that again.
Average Daily Balance = $3.35
Finance Charge = $2.00
2.00/3.35 = 59.7% Monthly interest
59.7% * 12 = 716.4% Annual interest
Yes, it's stupid and makes for a fun story on a Sunday, but when you have such a low balance and the minimum finance charge is a dollar amount rather than a percentage, you can get insane APRs.
wow,
they always push credit on me when I shop at macy's (which is pretty tacky btw). So for a savings $27 this guy got the privilege of lowering his FICO score for a year for probably a card with a 24% APR and a $1000 limit that is only to be used at Macy's.
You keep the $27 bucks.
@Jeff_McAwes0me:
Thank you for that math
I knew it was something relating to having one small purchase and not something totally absurd.
Personally, I like the Macy's card -- I get 20-25% off when I use it and pay it off right away. After doing that a few times, they offered me free gift wrap... no stress!
@Jeff_McAwes0me: Thanks for that. I knew it had to be something like this, but wasn't quite sure how it worked out.
What I'm most disgusted with is that someone paid $120 for a crappy Macy's house label sportcoat.
@PLATTWORX: Agreed on the sneaky stuff. A couple of months ago I paid off my Macy's bill entirely. Even called to confirm the following month (since I didn't receive a bill) that the balance was in fact zero, and that no payment was due. Then, a month later I received a bill for a $15 late fee plus some finance charges! However, I called and explained the situation to the CSR, and he was super nice about it and reversed it without question. My guess is that they make quite a bit of money off of people that don't realize things like this aren't legitimate charges, and/or take the time to call and correct it.
@Nathan Oliver: I would assume that $2.00 is the minimum finance charge. Had the purchase been made earlier in the month, the $2.00 finance charge would be applied to a higher average daily balance, making the annual rate much lower. Since the OP bought the item on the last day of the billing cycle, it makes the average balance really low.
This could produce some amusing results. Buy nothing in a month except for a candy bar on the last day.
Average Daily Balance= 1.00/30 = .03333
Finance Charge= 2.00
2.00/.03333 = 6,000% monthly interest rate
6,000% * 12 = 72,000% Annual rate.
Heh. I think I may do just that. It would be worth the $2 just for the laugh.
I blame the OP -- for making me lol at the though of a loan shark giggling while arranging a 716% loan.
He bought a private label INC coat from Macy's, he deserves the high ass interest rates, and ass raping good times. Boycott Macy's fieldsfanschicago.org
Zounds! Last Summer I was duped by macy's to buy some items and get a discount. I recieved the CC and the bill at the same time and stuck them in a drawer at my office. I just pulled out the bill and it shows the APR as 22.9% but where is was 716.4% mine shows 383.28%. this account statement was from a July 20, 2008. I guess things are starting to get bad.
I have a Macy's card (store not VISA) and I frequently save 15% on my purchases just for using the card on top of any coupons I have and I also get 2% back from the card on all my purchases. That makes Macy's worth my purchases, especially on things that otherwise would or can not be discounted.
It's called a minimum finance charge. It's $2.
The normal finance charge, as you can see on the upper-right-hand corner, is 23.99%