Discover: 0% APR For Life Decoded

Discover has been sending out targeted marketing for their 0% APR for life offer, and Reader Marcia is curious: “What’s the catch?”

Discover’s 0% APR “For Life” offer is for balance transfers. It provides that as long as you maintain 2 transactions per month, you can keep your “intro” 0% APR on your balance transfer…for life.

The Catch:
The reason you are required to maintain at least 2 transactions per month is that any payments you make to Discover are applied to the amount with the lowest interest rate. Meaning you have to pay off your entire balance before any of the money you pay is applied to the new (higher APR) charges. From

    Payment Allocation: We apply payments and credits to balances with low introductory/special APRs (such as special balance transfer and purchase APRs) prior to balances with standard APRs. Therefore, your savings will be reduced by making additional transactions or having balances that are subject to standard APRs. In addition, the length of time the introductory/special APRs will apply to your account may be reduced by the amount of your payments.

So that’s the catch, and now you know! As far as we can tell, there’s nothing stopping you from buying 2 packs of gum each month and using this opportunity to pay off your balance. Any more suggestions? Something we missed? Reasons not to use Discover? Let’s hear them in the comments.—MEGHANN MARCO