St George Plan and Pay

[mrsterryn]

I have a card with St George that is rarely used. It has a high limit so handy to have
It has a couple monthly small bills come out just to keep it ticking along
This month I happened to put a rather large dentist bill on it.
Just gone it to check the account (I check all the time ) and a Plan and Pay was offered
It is zero % interest ,only with an upfront charge .
Ok can someone explain what the catch is ? Zero percentage in this financial time is weird

 

[levelnine]

All my US Chase business cards offer 0% interest with no fees/charges for 12 months. Only requirement is to make the minimum payment each month. Makes absolutely no financial sense for them, but I don't look a gift horse in the mouth. Means I make an absolute killing on using my US cards — not only earning superior points to Australia and getting a 12-month interest free loan from them, it means I can time the transfer of Australian funds to the US when the Australian dollar is high and therefore save another 5-10%.

As long as you've carefully read the T&Cs and there's no hidden fees/charges, have at it.

It's a bit like Citi PayAll. Sometimes there are things in finance that are too good to be true. Use them while they last.

 

[Scr77]

I can’t offer any advice here, except to say that I’m sorry for the need to sit in a dentist chair!

 

[mrsterryn]

I can’t offer any advice here, except to say that I’m sorry for the need to sit in a dentist chair!

oh the dentist hurt and so did the bill. It has taken about five months

 

[daft009]

i had this offer on my account, though slightly different 0.99%.

it had auto activated so I rang to complain, they also could not find anywhere where I had accepted this offer.
have to call again in 3-4 day to get them to refund the interest etc

 

[albyd]

All my US Chase business cards offer 0% interest with no fees/charges for 12 months. Only requirement is to make the minimum payment each month. Makes absolutely no financial sense for them, but I don't look a gift horse in the mouth. Means I make an absolute killing on using my US cards — not only earning superior points to Australia and getting a 12-month interest free loan from them, it means I can time the transfer of Australian funds to the US when the Australian dollar is high and therefore save another 5-10%.

As long as you've carefully read the T&Cs and there's no hidden fees/charges, have at it.

It's a bit like Citi PayAll. Sometimes there are things in finance that are too good to be true. Use them while they last.

With the $A falling like a stone, I imagine that interest free loan is costing more to service (with the depreciation likely to outweigh the interest on your mortgage assuming that’s where the funds sit). How do you handle this?

 

[levelnine]

With the $A falling like a stone, I imagine that interest free loan is costing more to service (with the depreciation likely to outweigh the interest on your mortgage assuming that’s where the funds sit). How do you handle this?

To the contrary, exchange rate volatility + 12 months interest free is your friend. You have 12 months to wait for the AUD to appreciate against the USD. Choose a time when you are ahead on the exchange rate and transfer the full amount then. I'm obviously not transferring any money to the US now. But I was transferring plenty when it hit 70c towards the start of the year. Most of my purchases over the last 12 months has been at a lower rate than that, so made a killing.

 

[albyd]

Guess it involves taking a punt of sorts on the currency. This isn’t financial advice but my view is the $A isn’t getting anywhere near 70c for a very long time.

This whole Evergrande hoo ha and Australia’s dependence on exports to China mean it’s unlikely to stay where it is for much longer. I hope I’m wrong but then it will kill the economics for a lot of these US cards we are trying to apply for. YMMV - just my 2 cents worth is all.

 

[CMA222]

I have a card with St George that is rarely used. It has a high limit so handy to have
It has a couple monthly small bills come out just to keep it ticking along
This month I happened to put a rather large dentist bill on it.
Just gone it to check the account (I check all the time ) and a Plan and Pay was offered
It is zero % interest ,only with an upfront charge .
Ok can someone explain what the catch is ? Zero percentage in this financial time is weird

This is a variation of the buy-now-pay-later system except you are dealing with a bank.

The StG Plan&Pay offers staggered repayments for 3, 6 or 12 months. The upfront fee is 1% for 3 months so 4% pa, 2% for 6 months so 8% pa and 3% for 12 months so 12% pa. The interest calculations are correct if the repayments on the plan are made on time each month. If any payment is missed the remaining balance becomes a cash advance at 21% to 24% pa.

It comes down to how much you need/want to stagger the repayments. It is useful for cash flow management if you want to pay for the convenience of delayed repayments but if you do not pay in accordance with the plan you end up paying the full cash advance rate which is where the banks really make their profit.

As long as payments are made on time for each monthly cycle, as well as all the other balance of charges for that period, you only pay the establishment fee.

Read the info page

Plan and Pay

Set up a thrifty instalment plan on your St.George credit card with Plan&Pay. Make your new purchases easier with zero interest. T&Cs apply.

www.stgeorge.com.au

 

[levelnine]

Guess it involves taking a punt of sorts on the currency.

You don't need to take a punt on the currency in any large sense.

You just need to have a rough sense of the interest rate when you purchase and be willing to transfer when it is higher than that purchase rate.

Eg even if the AUD fell to 50c and you use your US card, you're still coming out ahead if it rises to 55c sometime in the 12 months following that purchase and you transfer the purchase amount then.

Of course, the further the AUD falls, the worse it gets in the sense of you have to spend more to meet the minimum spend for a sign-up bonus and the more the annual fee (charged in USD) costs. However, if you are churning, the AUD would have to fall to 20 or 30c for it no longer to make sense. And if that happens, we'll have far bigger problems than points earning.

 

[mrsterryn]

@CMA222 thanks I did read the terms and conditions, it just seemed a bit simplistic with regards to the upfront fee only
We tend to pay our credit cards off each month. I was just intrigued with the idea .
Thank you definitely appreciate your explanation