11-19-2010 05:29 AM
I strongly suspect the APR offered to a low risk customer is determined in large part by an internal behavioral scoring model that is more about maximizing profits than about avoiding risk.
The closer you get on the reward points to be able to use them, the higher a CCC would raise your rates. They have to pay for hose rewards somehow.
The simple fact is that CCCs raise interest rates on people because they can and reward cards are a prime candidate for this. My CU has 2 different types of MCs. One that offer 1% cash back at 9% and one that has a low rate at 7%, player's choice.
A smarter move would be to have a CC for emergencies at a low rate and or offers good BT rates and a reward card for purchases that will be PIF.
LOL lucky for us the rates on CCs aren't based on personality or attitude otherwise some of us here would have rates like 99%.
11-19-2010 07:20 AM
10000 points (thats like 1% cash back). i pushed alot of money through the card, so i got it in a years time. used it to buy a RUG DOCTOR!
I guess I could need one, too ! Anyway, I'm just $100 shy of a $25 account credit with them. There is no incentive to keep the points on the account any longer than that.
11-19-2010 07:22 AM
It might be interesting for me and other convenience users to try the experiment of rolling over modest balances for a few months: will this make the credit card companies think we are in greater financial difficulty and therefore higher risk meaning they raise the rate, or will this make them think lowering the APR might tempt us into rolling over a bigger balance? Anybody wanna try this experiment, which my wife and I ain't gonna do
Changing long going patterns is never a good idea with card companies. I don't think you will find anyone who wants to try that.
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO