Have you noticed your credit card interest rates...........

[Cool Runnings]

I've been using a line of credit, max amount 5k. Rates have been historically low for quite a few years now. My Monthly payment is $50 on about 3k.

[ITSec]

...most of us have much, much more than our grandparents. (snip)...more vehicles than adults per home...

Whew!

Bill Lovelady    IS
Eskimo Spy

Hey  - if those extra vehicles are motorcycles, what's the problem! 

[Cool Runnings]

Ok, you guy's made me feel guilty, just paid off my VISA. 

[Triple Jim]

I've been using a line of credit, max amount 5k. Rates have been historically low for quite a few years now. My Monthly payment is $50 on about 3k.

That works out to 20 percent per year!

[Cool Runnings]

That works out to 20 percent per year!

No, 3.49%. Anyhoo at my age it's time to start the Snowball to Hell. 

[Arizona Wayne]

Hardly the case.  Govt treasuries are < 1%.

The banks are getting away with it because the debtors are trapped and usury laws were gutted 30 years ago.   it's no more than treasuries having a bearing on your local loan shark.

(The topic was brought up and it's been answered.   Academic, not political answer.)

I see. so that's why the USA is approaching 20 Trillion $ in debt right now.  I guess according to you it's no biggee, right?

[travelingbyguzzi]

Hey  - if those extra vehicles are motorcycles, what's the problem! 

It is not a problem as long as you realize how wealthy you are.
Perspective.

[Arizona Wayne]

I use cash for day to day expenses. Use a credit card for traveling. I pay it off every month.
I borrowed money for a vehicle way back in 1995. Borrowed money for my house in 1994.   Casual debt is a sure way to stay poor.
People in the U.S. like to complain about how poor they are, but most of us have much, much more than our grandparents. Multiple tvs, much larger homes (tho smaller yards) more vehicles than adults per home, computers, cell phones, and lots of debt because of the desire for instant gratification.
Whew!


I use CCs for every day transactions and cash for little, paying off all when they come due.   Only time I carry extra cash is for a trip in case I need it for meals or such.   Everything we own is paid for(took a long time to get here) and it feels good.     But I'm an old fart too.

[LowRyter]

I see. so that's why the USA is approaching 20 Trillion $ in debt right now.  I guess according to you it's no biggee, right?

apples and oranges. 

My response was to your statement where you made an inference about govt debt linked to high credit card interest rates and I gave you a fact that made your claim totally bogus.

I didn't make any argument whether the debt was a problem or not.  I prefaced that by not going there as I said that it wasn't a political answer.  I know that you begged the question and were looking for a political fight.  I was only pointing out a simple fact that proved you 100% wrong. 

Cheers.

[Triple Jim]

No, 3.49%. Anyhoo at my age it's time to start the Snowball to Hell. 

Huh?  50/3000=0.0167  That's 1.67% per month.  Pay that 12 times per year and you paid 20% on the money that year.

Edit:  Maybe I misunderstood, and most of that $50 goes toward paying down the debt.  I thought you meant you paid $50/month interest on the $3,000.

[Perazzimx14]

About those cash back cards , someone is taking a beating , no such thing as free money .

 Dusty

But if your going to spend money on something anyway you might as well get a 1 to 3% discount. I have yet to get a check in the mail for spending cash.

[oldbike54]

But if your going to spend money on something anyway you might as well get a 1 to 3% discount. I have yet to get a check in the mail for spending cash.

 1 to 3% of what ? I am really curious about what is actually happening here .

 Dusty

[Lannis]

What is a credit card?    I do have a debit/credit card with Chase. 36.?? something rate.  I have never used  it.  Unbelievable that a bank can make such excessive profits.  Paying less  than 1/2% interest on their capital and then selling at 72 times cost?   What other business can get away with this? 

No one is "making" anyone take on a credit card.   Per the rules today, the banks can't "hide" the annual interest rate, so if it's 36%, you can see that right on the front of the application.

Someone who wants to buy things that he has no money for won't care if the interest rate is 1000% a year - very many of them won't pay the balance they owe anyway, will either die or go bankrupt first (see several posts).    It's like a 4-year-old - promise them a piece of candy RIGHT NOW or they can have a gallon of ice cream EVERY DAY THIS WEEK, they'll take whatever you're offering NOW and bugger tomorrow.

I have one credit and one debit card.   I pay them off every day on-line, always have.   Some things you just can't use cash for.

In 12 years, I've had my credit card scammed for $1100 and my debit card for $2500.   Each time, one visit to the bank and my money was magically back, and the merchant who took the card number for a purchase was "out" the money, not me .... Well worth the convenience of thousands of transactions ....

Lannis

[Cool Runnings]

No one is "making" anyone take on a credit card.   Per the rules today, the banks can't "hide" the annual interest rate, so if it's 36%, you can see that right on the front of the application.

Someone who wants to buy things that he has no money for won't care if the interest rate is 1000% a year - very many of them won't pay the balance they owe anyway, will either die or go bankrupt first (see several posts).    It's like a 4-year-old - promise them a piece of candy RIGHT NOW or they can have a gallon of ice cream EVERY DAY THIS WEEK, they'll take whatever you're offering NOW and bugger tomorrow.
I have one credit and one debit card.   I pay them off every day on-line, always have.   Some things you just can't use cash for.

In 12 years, I've had my credit card scammed for $1100 and my debit card for $2500.   Each time, one visit to the bank and my money was magically back, and the merchant who took the card number for a purchase was "out" the money, not me .... Well worth the convenience of thousands of transactions ....

Lannis

At my age the last thing I'm worried about is debt, time to increase it as much as possible!   

[Perazzimx14]

1 to 3% of what ? I am really curious about what is actually happening here .

 Dusty

I need to by a widget. I find said widget on widget.com and it cost $100. If I use cash it costs me $100. If I use a "cash back" credit card I am charged $100 but 1 to 3% of that total cost is put into a "savings" account for me. When a certain level of saving is accrued I can choose it withdraw that in the form of a check and spend it however I want. Since I don't carry a balance I don't have to pay interest charges so I end up saving 1 to 3% when I use a CC over cash. Pretty complicated I know.

[PeteS]

Back to the title of the thread, I have no idea what my credit card interest rate is. I have always paid it off every month. Don't spend it if you don't have it. I guess it was the way I was raised. One time there was a charge for interest on my card. I had paid for pre registration to a BMW rally using a card. The company treated it like I was borrowing cash I guess. Never used that card again.

Pete

[oldbike54]

I need to by a widget. I find said widget on widget.com and it cost $100. If I use cash it costs me $100. If I use a "cash back" credit card I am charged $100 but 1 to 3% of that total cost is put into a "savings" account for me. When a certain level of saving is accrued I can choose it withdraw that in the form of a check and spend it however I want. Since I don't carry a balance I don't have to pay interest charges so I end up saving 1 to 3% when I use a CC over cash. Pretty complicated I know.

 So the seller is effectively discounting their product ?

 Dusty

[Triple Jim]

I need to by a widget. I find said widget on widget.com and it cost $100. If I use cash it costs me $100. If I use a "cash back" credit card I am charged $100 but 1 to 3% of that total cost is put into a "savings" account for me. When a certain level of saving is accrued I can choose it withdraw that in the form of a check and spend it however I want. Since I don't carry a balance I don't have to pay interest charges so I end up saving 1 to 3% when I use a CC over cash. Pretty complicated I know.

But obviously the seller's credit card processing fees cover this discount to you, which means that they charge more for things they sell to cover it.  So it ends up being a fee for paying cash, rather than a discount for using a credit card.

[oldbike54]

But obviously the seller's credit card processing fees cover this discount to you, which means that they charge more for things they sell to cover it.  So it ends up being a fee for paying cash, rather than a discount for using a credit card.

 Ahh , that is what I am thinking . Cash discounts are usually easy enough to negotiate .

 Dusty

[Arizona Wayne]

My brother in law decades ago found out if he wants to build a credit history he has to have a credit card or make payments on a loan.  Up to that point he had always just paid cash.  To lenders he had no history of credit worthiness and they wouldn't take a chance on him.


My 1st CC was a Standard gas card back in the 60's.  Back then there were no Mastercards, Visa, etc.  With that 1 CC I was able to rent a car in the SF Bay area and none of my sailor buddies could because they had no such CC.  Now everyone has at least 1 CC unless they don't want any or can't qualify for 1.  I currently have 4 CCs and have paid 0 for any of them.  Have more for backup in case something happens and I don't lose options. 

[Triple Jim]

Ahh , that is what I am thinking . Cash discounts are usually easy enough to negotiate .

I don't know about usually, but it doesn't hurt to try.  I doubt if I can get a cash discount at my grocery store or gas station, for example.  I did get one on some land I bought a while back.  I remember when gas stations could offer a discount for cash, but I think credit card laws have squashed that.  If I remember correctly, and I might not, back in MD in the late '70s or '80s, gas stations were given the option of offering a discount for cash, or offering revolving charge accounts, but they were forbidden from offering both, so most went with the revolving charge option and eliminated the cash discount. 

[Rough Edge racing]

I don't know about usually, but it doesn't hurt to try.  I doubt if I can get a cash discount at my grocery store or gas station, for example.  I did get one on some land I bought a while back.  I remember when gas stations could offer a discount for cash, but I think credit card laws have squashed that.  If I remember correctly, and I might not, back in MD in the late '70s or '80s, gas stations were given the option of offering a discount for cash, or offering revolving charge accounts, but they were forbidden from offering both, so most went with the revolving charge option and eliminated the cash discount.

 Some gas stations around here as we speak offer two prices, cash and credit and it's advertised on a sign... ...We use a credit card like it was cash and the balnce is paid every month like some here have said... I like the radio commercials saying how you only need to pay 10  cents on a dollar if you file with us...Many think the credit card companies actually steal your money with brutal interest...Just more victims looking to blame lack of self control on someone else...

[Arizona Wayne]

Here in Az., Cal. some gas stations have 2 prices cash or CC .

[sib]

At my age the last thing I'm worried about is debt, time to increase it as much as possible!   

Yes, a wise and experienced investment councilor once told me that my strategy should be "you want your last check to bounce".

[Perazzimx14]

Ahh , that is what I am thinking . Cash discounts are usually easy enough to negotiate .

 Dusty

I like when I'm selling a motorcycle and people make a "cash" offer thinking I'll accept 100's less because they have a pile of green. I kindly tell them I'll accept payment with a check and or PayPal F&F and take the full asking price. Actually I'd probably take less if they used PayPal for the convenience of not having to go to the bank.

Try to buy a new car/motorcycle with cash and see what happens. You are treated like you are laundering money. You have to fill out a form declaring you didn't get the money from an illegal activity and potentially have to prove so. Good, bad or indifferent cash is almost more of a burden to deal with anymore. 

[oldbike54]

I like when I'm selling a motorcycle and people make a "cash" offer thinking I'll accept 100's less because they have a pile of green. I kindly tell them I'll accept payment with a check and or PayPal F&F and take the full asking price. Actually I'd probably take less if they used PayPal for the convenience of not having to go to the bank.

Try to buy a new car/motorcycle with cash and see what happens. You are treated like you are laundering money. You have to fill out a form declaring you didn't get the money from an illegal activity and potentially have to prove so. Good, bad or indifferent cash is almost more of a burden to deal with anymore.

 Yes , for purchases of $10,000.00 or more with cash a statement is required . Still , many stores locally are encouraging cash transactions . Nothing worse than standing behind a customer in the dollar store whose plastic won't work , while my green stuff always works .

 Dusty

[Perazzimx14]

Yes , for purchases of $10,000.00 or more with cash a statement is required . Still , many stores locally are encouraging cash transactions . Nothing worse than standing behind a customer in the dollar store whose plastic won't work , while my green stuff always works .

 Dusty

There is worse! The old head breaking out their rubber squeeze change purse placing each coin individually in the cashiers hand and counting as they go. 

Are you able to negotiate a discount at the dollar store when paying with cash?

[Scud]

So the seller is effectively discounting their product ?

 Dusty

The seller gives a portion of every credit card sale to the credit card company for the convenience of collecting payment via customers' cards. The credit card company is, in effect, giving the money to the vendor in advance - and thereby assumes the collection risk from the buyer. Fees can be complex and based on transaction, dollar volume, sliding scales - or some combination. For simplicity, let's say the credit card company takes 3% from the seller. Then it gives 1% back to the customer (long after the customer has paid). Companies estimate what percentage will pay cash and what will pay by credit. Some mark up their products to cover the average credit card transaction costs. But I think most factor in CC fees for every transaction - and those who pay cash are, in effect, failing to claim their discount.

The credit card industry philosophy is essentially this:  To make transactions convenient, we'll advance the money, take net 2% of every sale for ourselves, and if any borrower doesn't pay us on time, we'll make money on that too.

In my own business I look at the amount we pay annually for the privilege of taking credit cards and it is enough to put several new motorcycles in my garage every year... but... when a customer pays with credit, the business gets cash immediately and doesn't have to spend any time/money on collections or facilitating other types of transactions. Whether it's a necessary evil or a cost of doing business depends on one's point of view. I see it as a cost of doing business - and I take advantage of airline miles, cash rewards, etc. as a consumer (and never pay interest).

Credit limits also provide a nice safety net in case of emergency - and the ability to take advantage of an opportunity (new guzzi content).

As to the original question re rates - if you have a good history and they've raised the rates, just call and ask to be put on a lower-rate program - you can threaten to cancel and apply for a new, low-rate card if asking nicely doesn't work.

[yogidozer]

https://www.youtube.com/watch?v=bXId5jOTxdg

[LowRyter]

Bobby Layne (famous UT & NFLI Detriot football player):

"My only request is that I draw my last dollar and my last breath at the exact same moment."