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Regular Contributor
MMart078
Posts: 125
Registered: ‎08-08-2009
0

Annual Fee vs APR

Would it ever be justified to pay an annual fee for an exceptionally low APR for life. Lets say like an AMEX platinum charge card you know how it charges $450 what if for that fee they let you carry a balance every month with no interest rate? (effectively making a Credit Card)
Epic Contributor
Creditaddict
Posts: 20,896
Registered: ‎10-23-2007
0

Re: Annual Fee vs APR

I have no issues paying annual fees but I guess that's just because I have had really good credit and really bad credit and the fastest way to rebuild sometimes costs some money!

However if credit was never the issue, I think I would be a little more selective with my fees I would pay beyond my Amex Charge 

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Valued Contributor
wmarat
Posts: 1,754
Registered: ‎11-03-2007
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Re: Annual Fee vs APR


MMart078 wrote:
Would it ever be justified to pay an annual fee for an exceptionally low APR for life.NO Lets say like an AMEX platinum charge card you know how it charges $450 what if for that fee they let you carry a balance every month with no interest rate? (effectively making a Credit Card)

 

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Regular Contributor
MMart078
Posts: 125
Registered: ‎08-08-2009
0

Re: Annual Fee vs APR

ok, please elaborate on your opinion.
Established Contributor
Watchmann
Posts: 985
Registered: ‎05-14-2008
0

Re: Annual Fee vs APR


MMart078 wrote:
Would it ever be justified to pay an annual fee for an exceptionally low APR for life. Lets say like an AMEX platinum charge card you know how it charges $450 what if for that fee they let you carry a balance every month with no interest rate? (effectively making a Credit Card)

 

The cheapest credit is a PIF type of arrangement, but if you HAVE to carry a balance it certainly could be advantageous to have a fee based credit card with a low % rate rather than a fee free card with a higher APR.  You just have to do the math to see which is better. 

 

 

Regular Contributor
MMart078
Posts: 125
Registered: ‎08-08-2009
0

Re: Annual Fee vs APR

my thoughts exactly
Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
0

Re: Annual Fee vs APR

In the end, though, the lender computes "return on investment" as a percentage, not just a dollar amount.  And the reason is there is a proportionate cost of capital.  To make it fee based, they would have to limit your CL based upon your AF in order to make the numbers work.

 

:smileyhappy:

 

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