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Should we care about CC Interest Rates if we PIF?

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Established Contributor

Should we care about CC Interest Rates if we PIF?

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?





Message 1 of 25
24 REPLIES 24
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Moderator

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

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.

"If there's a lack of money in your life, understand that feeling worried, envious, jealous, disappointed, discouraged, doubtful or fearful about money can never bring more money to you, because those feelings come from a lack of gratitude for the money you have."

"Reactions are powerful creators because they contain every element needed to manifest—they're a combination of thought, belief, and feeling in action. Positive reactions create more positive things, and negative reactions create more negative things. If you can respond to negative situations calmly and lightly, instead of with emotional turbulence, what happens next in your life will be so much better."

- Rhonda Byrne

Message 2 of 25
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Moderator

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

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.
Message 3 of 25
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Frequent Contributor

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

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. 😊







Message 4 of 25
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Community Leader
Mega Contributor

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

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) ( Smiley Wink) 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 heartSmiley Wink.
Message 5 of 25
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Mega Contributor

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

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!

Message 6 of 25
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Established Contributor

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

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.

Message 7 of 25
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Established Contributor

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

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.

    EQ=841        TU=834         EX=834      INQ=0/0/0     UTIL=1%        AZEO


Message 8 of 25
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Established Contributor

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

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.

FICO: EQ 814 | TU 847 | EX ? (Started in the low 500's... you can do it!)

Amex BCE $25000, Amex AP $20000, SFFCU Visa $15000 + LOC $5000, USAA Amex $6000, USAA MC $7000, Cap1 $9500, Freedom $12000, Slate $500, Barclays "RIP" SM $11500, USBank Cash+ $7500, Citi Diamond $11200, Citi Double Cash $12000, Care Credit $13500k.
My Credit Repair Journey
Message 9 of 25
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Valued Contributor

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

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.

Message 10 of 25
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