Credit card 59.9% APR

[ZenOps]

http://money.cnn.com/2011/01/28/pf/credit_cards_interest_rates/index.htm?hpt=T2

Americans love debt. Now averaging almost 15% APR on new cards, up to 59.9% APR on states that only legislate "illegal loan sharking" above 60%.

At a time when the fed rate has been between 0.00% and 0.25% since Dec 16 2008.

Half of me wants to believe that the US can pay it back, half of me knows that they don't ever plan on paying it back.

[Iceman_19]

Wow that is absolutely sick. That could get very out of hand very quickly.

[Canmorite]

Not totally agreeing with CC companies charging ridiculous rates, but...


And if your credit is bad enough, you could even end up with a rate as high as 59.9% APR.

59.9% would be the extreme rate for card holders who pose a very high risk. You wouldn't lend money to someone with shitty credit for 5%, would you?

[Feruk]

I don't understand why they'd lend money at all to someone with a shitty credit score. I wouldn't lend someone cash who has a history of not paying back.

[ZenOps]

The possibility of default has historically been low.

If you lend out $1,000 at 59.9% to ten people and half of them run away, you still had the five that actually somehow managed to survive and pay it back (or be strung along for the next 30 years at minimum payments)

Which will still make you more money than lending $1,000 at 15% and have two people run away.

Its all a numbers game.

[dezmarez]

The interest rates on credit cards shouldn't really matter. Technically they are supposed to be used as a "temproary" means of finance. If you pay back the balance every month, the interest rate could be 300%, and it owuldn't matter

[Hi-Psi]

Originally posted by dezmarez
The interest rates on credit cards shouldn't really matter. Technically they are supposed to be used as a "temproary" means of finance. If you pay back the balance every month, the interest rate could be 300%, and it owuldn't matter

Yeah well very few people actually use them as they're intended...