Score went up, so did interest rate

[Anonymous]

Hi Everyone,

So I got a new Chase Card yesterday. My scores are 40-50 points higher than when I got the old Freedom card in Jan. I also had a derogatory off of my report. No new baddies or anything.  A couple new accounts since the old Chase Freedom. I had like a 625 and 640 score when I got the Freedom. They gave me 19. something % interest. Now that I've improved greatly, I get 23% on the new one. Why would that be? I worked so hard to get better rates. Instead, I got WORSE! It's a rewards card, so can't carry balance anyway, but still. They gave me an auto cli on my old card last month. This card was double the limit of the first one, but still seems weird on the interest. They checked the same two CRA's too. 

[Appleman]

Interest rates can be difficult to understand. I have cards that run the range of 10 -26% for the APR. The only time I let a balance ride is if there is a 0% promo working.

[Appleman]

And, congrats on the improved score and trade line!

[Anonymous]

Thank you very much! I really like Chase, so I'm not mad about it, just thought maybe I did something wrong here. I do have 15 months no APR, so I can carry a balance if I need to, but after that no way. I do have a 10.99% card I can use for that, if needed. My Fico shows my score in Jan for Ex was 623. Today, it just updated to 676. EQ in Jan was 651, today it's 682. TU in Jan was 652, as of 4/13, it was 680. I think I've done what I can do and just need to keep aging my report. Hoping to be over 700 by this time next year. 

[Appleman]

Awesome improvements in scores, betting 700 will be here soon as well. 

Chase will make up their reward money with a relative few carrying balances at those rates.

[Anonymous]

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@ncochran1989 wrote:

Hi Everyone,

So I got a new Chase Card yesterday. My scores are 40-50 points higher than when I got the old Freedom card in Jan. I also had a derogatory off of my report. No new baddies or anything.  A couple new accounts since the old Chase Freedom. I had like a 625 and 640 score when I got the Freedom. They gave me 19. something % interest. Now that I've improved greatly, I get 23% on the new one. Why would that be? I worked so hard to get better rates. Instead, I got WORSE! It's a rewards card, so can't carry balance anyway, but still. They gave me an auto cli on my old card last month. This card was double the limit of the first one, but still seems weird on the interest. They checked the same two CRA's too. 

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Ok,

1) In general 'rewards' cards help "pay for themselves" with routinely charging higher % rates.

2) Also, remember b/c the 'new one' was issued to a person with more accounts than the pervious cards...ie more risk.

Sometimes 'we' (humans) feel b/c the score is 15 points higher that = automatically a better profile forgetting that whenever you ADD 'one' more

account said account can be seen as a riskier proposition than when the prior card was issued, thus a vendor 'may' charge a higher rate due to the 'uncertainty' 

of what the 'one more' account does.

In a nutshell, to a degree one never knows WHICH 'one' will be the one that breaks the camel's back, so companies can take advantage and charge for the preceived 'risk'. 

[Anonymous]

I understand the part about now having more accounts, therefore, riskier now. The part about the score going up... we're talking 40-50 pts and a defaulted loan falling off that was present on the old account, so I do feel like that should be a good thing when they see it, perhaps it just helped with my approval. I did open a few cards this year, so I see what you're saying.

[Revelate]

Different credit card products (even from the same issuer) will have different tiers.

Ain't no big thing, as Appleman suggests, for call it 640+ FICO, anything north of ~11% is likely never worth carrying a balance on unless it's that or can't put food on table.  Cheaper ways to finance it.

[Anonymous]

I got the card today and the score was a 683, which pretty much matches my fico score. They used a card acquisition score. In jan, based on this model, they had me at a 701. I know that wasn't my score. I went to a credit union before the card reported and had a 640. Both pulled eq. Chase pulled ex too, which was even lower. No idea how they figure scores, but that's why my interest is higher.