How Discover tried to act smart, but just looked dumb
Some computer is out at whack over at Discover Personal Loans. They just sent me a promotional flyer comparing a loan of $16,000 at 7.99% APR against . . . wait for it . . . a loan of $16,000 at 7.99% APR. They then magically achieved thousands in savings by assuming that I'd pay off this loan in 48 months, rather than with minimum payments. (That's assuming you actually get 7.99% APR from them.)
Why this is stupid:
* Discover knows (or could know) that I have an installment loan, for a car - not a credit card loan with low minimum payments. OK, so they could also have seen the part I put on my other credit card, and the other moving expenses, but that's only $4500.
* They also know I just got it, and they should know my credit's good enough for it to be at a better rate than 7.99%, I suspect that's just a software limit - it's at least smart enough not to offer a loan that looks worse.
* If I really was only making minimum payments before, how likely is it that I would repay a debt with far higher payments?
I guess it's possible this was triggered by my credit limit increase request last month, but the comparison they used is still highly illogical. Even a fool could tell something's up if you don't change any of the big variables but still promise huge savings
Why this is stupid:
* Discover knows (or could know) that I have an installment loan, for a car - not a credit card loan with low minimum payments. OK, so they could also have seen the part I put on my other credit card, and the other moving expenses, but that's only $4500.
* They also know I just got it, and they should know my credit's good enough for it to be at a better rate than 7.99%, I suspect that's just a software limit - it's at least smart enough not to offer a loan that looks worse.
* If I really was only making minimum payments before, how likely is it that I would repay a debt with far higher payments?
I guess it's possible this was triggered by my credit limit increase request last month, but the comparison they used is still highly illogical. Even a fool could tell something's up if you don't change any of the big variables but still promise huge savings