Lower apr + AF vs. higher apr and no AF discussion

pizza1 · ‎05-17-2016

Thought Id throw out a discussion here, and welcome all thoughts!

Im not in any dilemma per se, just trying to decide later on which cards to close, which got me thinking a little.....

Would you keep a CC open because of a much lower apr but has an AF, or keep open the much higher apr cc but no AF?? (obviously used for "cushion", and I know how some here feel about "cushion")....anyway...

I know some folks here are all "close any CC that has an AF". Now....I dont carry balances, so right now it doesnt effect me one way or the other, BUT....what if later down the road I decided to step away from my PIF shell I live in, and decide to take advantage of a balance for a few months.

Ill give an example.....

Stash Visa- 16.24% +$95 AF...........VS............Ebates Visa- 25.24% and NO AF.......

Obviously, if I would ever carry a balance, it would be on a promo of some sorts, so not saying Id carry a balance on just any ole CC.

Im merely throwing out the question as to keeping a CC with an AF because of a lower apr.

Thoughts?....or share your own experiences!

Anonymous · ‎05-17-2016

What seems to make more sense to me is to just have an 'emergency carry-a-balance' low APR card sock-drawered unless needed.

Right now my only AF card is CSP but the ability to transfer points (and especially those from the FU card) to miles makes it worth it for me, and I have 2 no-AF cards with sub-10% APRs, with a sub 5% on the horizon eventually.

I think it all comes down to what is the ultimate value of a given card to you, as far as AFs and APRs are concerned.

ddemari · ‎05-17-2016

I'd keep the AF fee card if it benefited me, if I were not ever carrying a balance. But sometimes I do revovle a balance and will go to one of my cards that has the 95 dollar annual fee.
I guess it depends on your benefit from the card. As the rewards I get sometimes are not countered because I'm paying interest. The stash visa I had and closed it, but unless I really benefited from however their rewards work, is close it and use one of the 20 other cards I have with the same apr lol.

Anonymous · ‎05-17-2016

Don't keep an AF card solely for the lower APR because if you carry a balance you're paying interest and an AF which could easily be the same as a higher APR card's interest fees. Have a lower APR card for balances and the AF/high APR cards for rewards. Seems logically simple

pizza1 · ‎05-17-2016

@Anonymous wrote:
What seems to make more sense to me is to just have an 'emergency carry-a-balance' low APR card sock-drawered unless needed.

Right now my only AF card is CSP but the ability to transfer points (and especially those from the FU card) to miles makes it worth it for me, and I have 2 no-AF cards with sub-10% APRs, with a sub 5% on the horizon eventually.

I think it all comes down to what is the ultimate value of a given card to you, as far as AFs and APRs are concerned.

Right! Agree....

I have Other majors that have better rewards structure, and plus my monthly spend is so low (its just me), that I dont even come close to meeting max spend on any of the categories. This would be a card like you said to keep around for cushion or whatever. Right now in my rebuilding, Im not going to get the lower apr's...because of my BK etc..., so far my lowest is Navy at 15.24%, no AF.

But, when trying to decide which Synch card to keep open, (or a few)...thats when Im deciding on the above proposed question....

kdm31091 · ‎05-17-2016

@Anonymous wrote:
What seems to make more sense to me is to just have an 'emergency carry-a-balance' low APR card sock-drawered unless needed.

Right now my only AF card is CSP but the ability to transfer points (and especially those from the FU card) to miles makes it worth it for me, and I have 2 no-AF cards with sub-10% APRs, with a sub 5% on the horizon eventually.

I think it all comes down to what is the ultimate value of a given card to you, as far as AFs and APRs are concerned.

Meh. For me, I don't think a dedicated "just in case" sockdrawered low APR card is necessary. I'm only going to carry a balance if I have a 0% promo. Otherwise, why throw money away on interest?

Of course, if there's an emergency, that's one thing, but it should happen infrequently enough that the difference in interest is probably not going to be massive and doesn't warrant having an otherwise useless card. But I tend to be simplicistic about number of cards.

For annual fees, I'm only going to pay one if the product benefits me sufficiently to justify it. If you get no use out of Stash, OP, I wouldn't be paying $95 a year for it. $95 alone could cover plenty of interest on a "higher APR" card.

pizza1 · ‎05-17-2016

@kdm31091 wrote:
@Anonymous wrote:
What seems to make more sense to me is to just have an 'emergency carry-a-balance' low APR card sock-drawered unless needed.

Right now my only AF card is CSP but the ability to transfer points (and especially those from the FU card) to miles makes it worth it for me, and I have 2 no-AF cards with sub-10% APRs, with a sub 5% on the horizon eventually.

I think it all comes down to what is the ultimate value of a given card to you, as far as AFs and APRs are concerned.
Meh. For me, I don't think a dedicated "just in case" sockdrawered low APR card is necessary. I'm only going to carry a balance if I have a 0% promo. Otherwise, why throw money away on interest?

Of course, if there's an emergency, that's one thing, but it should happen infrequently enough that the difference in interest is probably not going to be massive and doesn't warrant having an otherwise useless card. But I tend to be simplicistic about number of cards.

For annual fees, I'm only going to pay one if the product benefits me sufficiently to justify it. If you get no use out of Stash, OP, I wouldn't be paying $95 a year for it. $95 alone could cover plenty of interest on a "higher APR" card.

Right! Agree here as well...

Thats why I like to throw out proposals like these to get opinions, and thoughts, and help make a more educated decision. I obviously dont get anything from Ebates or Stash, I have them just to have them.

Just out of curiouslity, I checked all my majors (Navy, Disc, Barclays, Cap1, etccc), to see if any BT were offered, and out of all of them, only ONE.had any offers at all....Discover. Offered the 0% for 12 months, or 4.99% for 18 months.

I was a bit surpised that noone else had an offer. Maybe because my credit reports dont show anything to BT, LOL...

dragontears · ‎05-17-2016

It is a simple case of math
Assuming the 2 rates the OP listed and consistently revolving $1000 each month
25.24% = $252.40/year
16.24% = $162.40 + 95 = 257.40/year
So unless you revolve more than $1055.56/month you are losing money paying the AF (assuming you get no other benifits from the AF card)

Anonymous · ‎05-17-2016

If you don't carry a balance, then APR doesn't matter. For me, as long as the high annual fee card has benefits that matter to me then it certainly outweighs the cost of AF. For example, the Amex platinum and Ritz have high fees. But after the annual credit and deductions, these cards are worth it and don't mind paying the fees that come with having them.

So it will come down to individual spending habits.

Anonymous · ‎05-17-2016

@pizza1 wrote:

I know some folks here are all "close any CC that has an AF". Now....I dont carry balances, so right now it doesnt effect me one way or the other, BUT....what if later down the road I decided to step away from my PIF shell I live in, and decide to take advantage of a balance for a few months.

Obviously, if I would ever carry a balance, it would be on a promo of some sorts, so not saying Id carry a balance on just any ole CC.
Im merely throwing out the question as to keeping a CC with an AF because of a lower apr.

Thoughts?....or share your own experiences!

Continue your good habits of paying in full.

Don't get carried away and only use what you need for necessities and bills.

Plus, the few months will likely not make much of a difference.