Two very old credit card interest rates

[GON]

I have some very old credit cards (Visa). One by Capital One, another by a community Credit Union.

I have a primary card that I use almost extensively as part of an airline status program. This card charges crazy high interest rates, but I pay it off monthly so the interest rate is irrelevant unless I screw something up.

Reviewing some old credit card, I was happy to see some lifetime credit card interest rates. As we learned with T-mobile, lifetime rates mean nothing, but nonetheless, thought admirable these two organization have yet to change their Visa rates:

Capital One- 4.85% for life
Community Credit Union- 7.99% for life

What these Visa card don't offer is cash back, no rewards, just the old-fashioned Visa card. Get a bill, pay in 30 days, or get charged nominal interest.

I find it confusing banks charge 20 percent, 30 percent, or even higher interest on charge cards.

Would love to get back to the old American Express days of yesteryear where charge cards were required paid in full in 30 days--- and consumers keep their money instead of being a slave to Visa/ Mastercard, etc.

 

[rstsco]

I have one card issued by my credit union at 9.9%, but typically don't use it. A few years ago, when my business travel increased, I got the Chase Sapphire Reserve. At that time the annual fee was $550 and it more than paid for itself. They have raised the annual fee to $795 and I don't travel as much as I used to. The new fee will hit me this August, so I'll have to decide whether to keep it or not. I still would break even paying that fee, but not sure I want to bother. My cards are always paid before the due dates.

 

[Hohn]

The latter point Gon makes went away because it was far less profitable. Remember, everyone's debt is someone else's asset. They WANT people in debt.

 

[Sayjac]

Honestly, I couldn't tell you the interest rates for any of my CCs. I have them set to auto pay the previous month balance, and that's it. Having said that, if one does carry a balance over, better know which card has the best rate.

 

[DCDG]

i never worried about interest rates i never carry cc balances either. I could see how having high interest cards even without a balance could negatively affect one's credit rating. Told myself from day one when I applied for my 1st cc you will not get in debt but will establish a credit rating for larger future luxuries like owning a home and getting good rates on an auto lease or purchase. I always use my cc's as a tool for vacation spending, online purchases or a service I have done something that could be disputed if necessary and doesn't tie up my monies while waiting on a dispute resolution.

 

[rijndael]

I could see how having high interest cards even without a balance could negatively affect one's credit rating.

Can you elaborate on this?

How does the rate impact credit with no balance? I've never seen rates on my credit reports, only available credit and balance.

 

[DCDG]

Can you elaborate on this?

How does the rate impact credit with no balance? I've never seen rates on my credit reports, only available credit and balance.

my guess would be to a lender you're potential to be a bad borrower is this information not all connected and shared to the credit bureaus.. why would someone have a credit line with high interest to begin with normally due to lack of or bad credit? Doesn't mean you have zero'd balances you're a good borrower idle credit is no good either.

I have a family member that did a so called bathroom remodel $12,000 x 60 months @ 29.9% that isn't looking good same for her ac replacement interest rate somewhere in the 24% range $9,600 x 84 months.

 

[QwikKota]

Paying off balances on a monthly basis shouldn't affect your credit rating regardless of interest rate.

Aside from businesses, people who can't pay them off on a regular basis should not be using them. Way too easy to get in deep debt. It should be a crime to have credit card representatives on college campuses giving away free t-shirts for opening an account. I realize these are adults but just barely.

 

[Hohn]

Can you elaborate on this?

How does the rate impact credit with no balance? I've never seen rates on my credit reports, only available credit and balance.

Credit rating is a measure of risk.

In theory, the fact that you COULD incur a lot of high interest debt would represent risk and negatively impact your credit score.


But in practice, it's more of the opposite. A person who *could* have put 20k on a credit card but instead paid it off in full every month is actually a much LOWER risk.

Credit risk assessment has moved from what you might do to what you actually do, because generally speaking people who are financially responsibly don't just suddenly stop, and vice versa.

I could put 40k or more on credit cards today if I was willing to end much of my financial security. But I won't, and the ratings bureaus know this and award a high score/low risk assessment as a result because they see a lengthy history of paying in full every month with monthly accruals well in line with my income.

 

[rijndael]

Paying off balances on a monthly basis shouldn't affect your credit rating

Sometimes your credit report gets updated before the payment is posted to your account. It's just a timing issue.

 

[rijndael]

my guess would be to a lender you're potential to be a bad borrower is this information not all connected and shared to the credit bureaus..

I don't doubt there are private databases. I've just never interest rates on any of my 3 bureau credit reports.

 

[The_Jeff]

Those sound like good options to have in the back pocket! You never know when "life happens" and you'll want to finance something like a new furnace even if you "can afford it."

 

[DCDG]

I don't doubt there are private databases. I've just never interest rates on any of my 3 bureau credit reports.

I’m just throwing this out probably not stuff open for us to see on the credit bureaus lenders wouldn’t see the actual interest rate but I’m sure there’s an algorithm that classifies our borrowing power vs what we have connected to our socials.

 

[walterjay]

I think one of my cards is something like 32.99% But I don't care because I always pay it off.

Crazy usury rates. I feel bad for the people who get stuck in the interest trap. Might be able to borrow from the mob for less.

 

[DCDG]

I think one of my cards is something like 32.99% But I don't care because I always pay it off.

Crazy usury rates. I feel bad for the people who get stuck in the interest trap. Might be able to borrow from the mob for less.

When I worked for the Catholic Church if a parish borrowed from the Diocese it was at 10% interest. No grace periods either lol you went from black to red flagged

 

[rijndael]

My Parent Plus college loans are around 10%.

 

[QwikKota]

Sometimes your credit report gets updated before the payment is posted to your account. It's just a timing issue.

I typically make 3 or 4 payments per month to try to avoid that but it's not the end of the world, small credit hit unless we are talking large balances. I just use it for the cash back. Wife has one that does hotel points.

 

[rijndael]

My credit score was 850 the last time I checked, I'm not worried about a 30 point drop. It generally comes back up the next month.

 

[Pablo]

My credit score was 850 the last time I checked, I'm not worried about a 30 point drop. It generally comes back up the next month.

840-850 and the only variable is if I wait until the very last minute to pay off our two cards (a-~$5K, b-~$2K)

 

[JohnnyG]

Can you elaborate on this?

How does the rate impact credit with no balance? I've never seen rates on my credit reports, only available credit and balance.

I can give you an example. I've had credit cards and a mortgage through Chase bank. Pay cards off every month and have 60 years of credit without a single missed payment. Still have not reached the highest (850?) credit rating.

So I paid off my mortgage 6 years early. Guess what, my credit rating went DOWN 2 points!