topic Re: Should we care about CC Interest Rates if we PIF? in Credit Cards

Should we care about CC Interest Rates if we PIF?

Anonymous — Thu, 31 Oct 2019 16:36:06 GMT

My main credit experience is in Canada. Almost all credit cards here have a standard rate for all customers, usually 18.99 or 19.99%. In the US only a couple of my cards are that low, with most being in the 26% range - I get that, I have little history, and since I PIF it doesn't afllfect me.

But should I care about it? Will any of my cards ever lower the rate without me using it as a revolver? Will I get better rates on new cards in future as my score increases?

Re: Should we care about CC Interest Rates if we PIF?

gdale6 — Thu, 31 Oct 2019 16:40:55 GMT

Yes you should care there may be a time where you have to revolve and carry balances. As your Fico and payment history improves then you should qualify for lower rates on your cards. CUs offer much lower rates than major banks even to young credit files.

Re: Should we care about CC Interest Rates if we PIF?

FinStar — Thu, 31 Oct 2019 16:42:26 GMT

I personally don't care about APR per se, especially when you PIF. But, there's nothing wrong with having an aspirational goal to reduce them if the lender has such a flexible policy.

Of the lenders listed in your profile, only the [US-issued] AmEx revolver might have some potential for lowering the APR. All others will not lower by request.

Re: Should we care about CC Interest Rates if we PIF?

Hut1 — Thu, 31 Oct 2019 16:44:01 GMT

If you're PIF, then no, it's not that big of a deal. Some lenders do entertain APR reductions & I typically ask that question before app'n. Navy Federal for instance will allow an APR reduction request once a year. They also reduced my APR by a half point when I asked for a CLI, so it truly varies per lender.

Seems like you have a good amount of cards in your siggy. If you garden for a while and age things a bit, you can probably get your credit health up enough to qualify for lower rates for future apps. 😊

Re: Should we care about CC Interest Rates if we PIF?

AverageJoesCredit — Thu, 31 Oct 2019 16:52:33 GMT

Yes and no. If you do pif, its irrelevant. However, theres only so much we can do with our credit cards, ie chasing cli, etc but achieving lower aprs can a) be worth it if by chance one needs to carry a balance 2) ( ) its aestheticslly pleasing and D) can sometimes be worth it to help us gauge our credit journey. If anyone can get my A,2,and D reference, especially any of you single ladies, you just stole my heart.

Re: Should we care about CC Interest Rates if we PIF?

Anonymous — Thu, 31 Oct 2019 17:08:48 GMT

It depends what you mean by care! If you PIF always and expect to be able to continue doing so, I certainly wouldn't trade rewards for lower APR (i.e. taking a card with lower rewards and APR over one with higher ones).

I also find the "just in case" argument a little uncompelling as it only applies, IMO, to a small set of circumstances. If you have huge emergency bills that you cannot pay off fairly quickly: a) in meaningful outcome there's not a huge difference between being swamped by a 25% APR vs a 10% APR, one just causes BK quicker, and b) if you are paying for any length of time, your low APR will go away as creditors reduce limits and/or raise rates as allowed.

So it only makes sense for "small" emergencies where your emergency fund runs out.

And lastly, on the recreational front, I think there can be some negative to contacting lenders for this type of request. There is a cost for a rep to handle it, and it's a revenue decreasing request from the issuer viewpoint anyway. It doesn't increase your value as a customer, which may matter at some stage.

TL/DR: No!

Re: Should we care about CC Interest Rates if we PIF?

Andypanda — Thu, 31 Oct 2019 17:17:21 GMT

If one has a large enough emergency fund, and you feel you can pif if you get laid off, or gave an unexpected expense, then you shouldn't worry about it.

Re: Should we care about CC Interest Rates if we PIF?

OmarR — Thu, 31 Oct 2019 17:34:06 GMT

As a PIF'er myself, my answer is "No, you should not care". But I also have an additional viewpoint/datapoint:

Some of my cards constantly send me 0% promo rates for (usually) 12 months. I believe I am constantly bombarded with these offers because I never carry a balance, but I could be wrong. If I ever need to ride a balance, I can just activate one of their offers.

Re: Should we care about CC Interest Rates if we PIF?

kroberts67 — Thu, 31 Oct 2019 18:25:33 GMT

I don't, for the most part. In case I need to carry a balance, I would go to my lowest APR card, or a bal transfer card.

Re: Should we care about CC Interest Rates if we PIF?

galahad15 — Thu, 31 Oct 2019 18:26:22 GMT

I would advocate that yes, caring about APR matters greatly, at least to me in my own experience. A person can always PIF but since we never really know if or when an emergency may occur, it's always a good idea imo to have at least one (or more) cards with a low APR available.

Re: Should we care about CC Interest Rates if we PIF?

iced — Thu, 31 Oct 2019 18:28:11 GMT

@gdale6 wrote:
Yes you should care there may be a time where you have to revolve and carry balances. As your Fico and payment history improves then you should qualify for lower rates on your cards. CUs offer much lower rates than major banks even to young credit files.

Even if all your cards have a 5% APR, there should never be a time when you have to revolve and carry balances.

I've said it before, and I'll certainly be saying it again many times here: credit cards are not a replacement for savings. If you reach a point where you have to rely on credit cards and carry balances to cover expenses, your savings strategy has already failed.

Reducing APRs on cards in anticipation of such an event is addressing a symptom and not the problem.

Re: Should we care about CC Interest Rates if we PIF?

staticvoidmain — Thu, 31 Oct 2019 18:43:25 GMT

No.

I am assuming you use it like a debit card or a charge card, and you never carry or have any plans on carrying a balance. I am also assuming you have a system set up for not missing a payment. It really only matters once you carry a balance over, whether you mean it or by accident.

Re: Should we care about CC Interest Rates if we PIF?

pinkandgrey — Thu, 31 Oct 2019 20:08:14 GMT

@AverageJoesCredit wrote:
Yes and no. If you do pif, its irrelevant. However, theres only so much we can do with our credit cards, ie chasing cli, etc but achieving lower aprs can a) be worth it if by chance one needs to carry a balance 2) ( ) its aestheticslly pleasing and D) can sometimes be worth it to help us gauge our credit journey. If anyone can get my A,2,and D reference, especially any of you single ladies, you just stole my heart.

@AverageJoesCredit Lol gotcha, Buzz.

OP, this is what I would say too. If you always PIF, then the APR doesn't matter at all. But if you think you may ever have to carry a balance, you'll want the lower rate. Usually getting the lender to lower the APR is possible with good usage/behavior.

Re: Should we care about CC Interest Rates if we PIF?

AverageJoesCredit — Thu, 31 Oct 2019 20:34:16 GMT

Lol, @pinkandgrey , 💗💗💗🙋‍♂️😄

Sincerely SouthBendSlayer🎃

Re: Should we care about CC Interest Rates if we PIF?

galahad15 — Thu, 31 Oct 2019 20:39:38 GMT

@iced wrote:
@gdale6 wrote:
Yes you should care there may be a time where you have to revolve and carry balances. As your Fico and payment history improves then you should qualify for lower rates on your cards. CUs offer much lower rates than major banks even to young credit files.
Even if all your cards have a 5% APR, there should never be a time when you have to revolve and carry balances.

I've said it before, and I'll certainly be saying it again many times here: credit cards are not a replacement for savings. If you reach a point where you have to rely on credit cards and carry balances to cover expenses, your savings strategy has already failed.

Reducing APRs on cards in anticipation of such an event is addressing a symptom and not the problem.

Respectfully disagree -- there is nothing inherently wrong with using a credit card with an exceptionally-low APR as a low-interest loan, in the case of an emergency (or otherwise), if someone is willing to do so. It's functionally the same as taking out a personal loan with a low interest rate, or taking out a car loan to finance an automobile, etc.

Re: Should we care about CC Interest Rates if we PIF?

TSlop — Fri, 01 Nov 2019 01:59:48 GMT

I PIF and I have never carried a balance since opening my first credit card in 2006. I don't care about the APR one bit. If I ever were to get into a situation where I'll have to utilize my credit and not PIF, I'd app for a BT/0% card and move the balance there.

Re: Should we care about CC Interest Rates if we PIF?

Anonymous — Fri, 01 Nov 2019 02:15:27 GMT

@TSlop wrote:
I PIF and I have never carried a balance since opening my first credit card in 2006. I don't care about the APR one bit. If I ever were to get into a situation where I'll have to utilize my credit and not PIF, I'd app for a BT/0% card and move the balance there.

That can be a little optimistic! The sort of emergency scenario people talk about is where you have lost your job (as has any partner) and you have just got a huge debt. You might not be able to get any sort of decent 0% card (without lying anyway!)

Re: Should we care about CC Interest Rates if we PIF?

AverageJoesCredit — Fri, 01 Nov 2019 02:21:40 GMT

Some people live above the rest and are financially set for life. They view credit as black and white and as such if a person is carrying a balance, like Momma says, they must be the Devil. Not everyone is as fortunate as some, for some life isnt so kind. Its kinda like the ones who say "Money doesnt matter""...those are usually the ones who have it. Hope everyone has a safe and low apr Halloween

Re: Should we care about CC Interest Rates if we PIF?

OmarR — Fri, 01 Nov 2019 21:20:53 GMT

@galahad15 wrote:
@iced wrote:
@gdale6 wrote:
Yes you should care there may be a time where you have to revolve and carry balances. As your Fico and payment history improves then you should qualify for lower rates on your cards. CUs offer much lower rates than major banks even to young credit files.
Even if all your cards have a 5% APR, there should never be a time when you have to revolve and carry balances.

I've said it before, and I'll certainly be saying it again many times here: credit cards are not a replacement for savings. If you reach a point where you have to rely on credit cards and carry balances to cover expenses, your savings strategy has already failed.

Reducing APRs on cards in anticipation of such an event is addressing a symptom and not the problem.
Respectfully disagree -- there is nothing inherently wrong with using a credit card with an exceptionally-low APR as a low-interest loan, in the case of an emergency (or otherwise), if someone is willing to do so. It's functionally the same as taking out a personal loan with a low interest rate, or taking out a car loan to finance an automobile, etc.

Galahad, I think A LOT of people would & will agree with your post, as that is how they actually live. But I am the weirdo that never does personal loans nor do I finance vehicles, so I am going to agree with iced on this one.

There are so many of us that chase, brag, and give each other applauses & praises when we acquired a new card, a SUB, CLI, successful recon, etc. But would be more money (literally) would be bragging about savings total, retirement accounts total, emergency funds total, and how long it's been since you had a mortgage or car payment.

Many of us talk about being in the garden until the next card or app. How about a "garden" where we are all counting the months until we have no house/car/boat/etc payments (i.e. NO interest on anything whatsoever)? And than staying there!

Re: Should we care about CC Interest Rates if we PIF?

iced — Fri, 01 Nov 2019 21:47:22 GMT

@OmarR wrote:
@galahad15 wrote:
Respectfully disagree -- there is nothing inherently wrong with using a credit card with an exceptionally-low APR as a low-interest loan, in the case of an emergency (or otherwise), if someone is willing to do so. It's functionally the same as taking out a personal loan with a low interest rate, or taking out a car loan to finance an automobile, etc.

Galahad, I think A LOT of people would & will agree with your post, as that is how they actually live. But I am the weirdo that never does personal loans nor do I finance vehicles, so I am going to agree with iced on this one.

Half this country has no savings and lives paycheck to paycheck. It's a well-known problem. A part of what keeps that problem going strong is that there is a very blind eye turned to those who make decisions that further that problem. We even tell them that it's out of their control or that it's what anyone would do or that it's not inherently wrong. How does that help?

How do we even start to solve our national debt and savings problem when the prevailing attitude about it is that it's absolutely fine to rely on a credit card should a sudden unplanned expense arrive? The answer starts with us stopping the nonsense that it's fine to jump into CC debt when a problem arrives and figure out how to dig out of that hole later.

If something happens and you have no choice in the matter, you have no choice in the matter, but it doesn't change the fact that the choice you were forced to make wasn't the result of a slowly building problem that went ignored. So again I state, lowering your APR because you expect you might need to carry debt on a CC is addressing a symptom, not the problem.

Anyway, I've spent enough OT time on that one. I'm moving on.