More on those incomprehensible credit terms

A kind reader sent in a note explaining the "small print" I mentioned in my earlier real-life-debt: the weblog entry on refinancing your debt through the BankOne low-interest checks.

He explains:

"That incomprehensible language is their way of saying if you charge anything then your payments will be credited to the lower interest rate first. so say you use your check to transfer $2000 @ 3.9% then you charge $500 @ 17%, and you're paying $100/month. For the first 20 months you'll pay your down the 3.9% balance and they'll happily take that 17% interest on your $500. What they're hoping is you'll transfer a big balance and then charge another big balance so that they can suck you dry on the high interest rate of your charged items.