To The APR Sensitive, Help Me Understand You

[bourgogne]

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@UpperNwGuy wrote:

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@galahad15 wrote:

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@Anonymous wrote:

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@galahad15 wrote:

From the paypal website, the APR tiers appear to be:

16.99% for Account Type 1 or
24.99% for Account Type 2 or
27.99% for Account Type 3

Since there are other 2% cashback cards AFAIK that can be had at lower go-to APRs, this one does not seem to look that appealing to me   The only reason I would app for a card with a high APR at this time would be if it had truly unique features, such as Blispay, Cash+, etc.

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What does APR have to do with anything? If you're carrying a balance and paying any interest on a cash back card, you're using it wrong

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Not to go off-topic or anything, but for me personally IMO, APR is an indicator to me of how much a bank or CU values its business relationship with me.  Also since it is still sometimes possible, although increasingly rare, to get rewards cards with low APRs.  I usually never carry any balances on any of my rewards cards, but if I were to hypothetically do so, it would be on cards that are below 10% interest (the lower the better).  Rewards cards with low- or lowish-APRs actually used to be very common in the past -- for example, it used to be that around 2012 or so, you could still get Chase Freedom cards with ~12% V APRs, and Cap1 rewards cards around 10% or even below, but in today's cc environment and outside of CUs, it can be challenging to find rewards cards with low APRs.

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Why do you care if a bank or CU values its business relationship with you?  This is about money, not about personal feelings.  I always have a couple of very low APR cards in reserve in case I ever find myself in a financial bind, but I don't care what APR is on the rewards cards.  I will never carry a balance on those cards.  I have them to earn rewards, and as long as the rewards keep flowing, I frankly don't care if the bank values its relationship with me.

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spot on + I have found with some of my cards that <% = <SL$ but maybe its coresidence + sigs look better without all that % jazz

[Anonymous]

APR matters to anyone that has common sense. You may not use it today or tomorrow or ever, but if you need to then you'll be glad. I don't plan on playing the life game where I would 'need' to use my life insurance because that would be unwise and therefor wrong, but in the one instance that I do need it then I (well, others) will be glad I have it. 

I picked up a 0% introductory rate APR card in order to be able to carry a balance, and then used it for my gf's wedding ring. I could have just paid cash out of my savings, but the interest-free loan allows me to continue to draw interest on my money that's in savings up until I pay it off next year. And when that card rate goes back to normal I'll find another 0% APR to keep and hold just in case for any similar purchase. It would be unwise not to.

[Anonymous]

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@Anonymous wrote:

APR matters to anyone that has common sense. You may not use it today or tomorrow or ever, but if you need to then you'll be glad. I don't plan on playing the life game where I would 'need' to use my life insurance because that would be unwise and therefor wrong, but in the one instance that I do need it then I (well, others) will be glad I have it. 

I picked up a 0% introductory rate APR card in order to be able to carry a balance, and then used it for my gf's wedding ring. I could have just paid cash out of my savings, but the interest-free loan allows me to continue to draw interest on my money that's in savings up until I pay it off next year. And when that card rate goes back to normal I'll find another 0% APR to keep and hold just in case for any similar purchase. It would be unwise not to.

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Introductory APR is irrelevant to this discussion. 0% introductory rates are just that, a 0% introductory rate.

My question isn't about this at all, rather its about being approved, for example, the Paypal 2% cash back card with a high rate. Carrying a balance with any APR defeats the purpose of the rewards.

Hopefully in your scenario with your ring purchase your introductory rate was indeed on a cash back/rewards card which can then be applied to a nice honeymoon, that would have been twice as nice! However, most importantly, congratulations to you two and best wishes to your future together!

[Anonymous]

The bottom line is most Americans carry balances on their credit cards, hence they care about APR because they don't want to get owned by the credit card company too badly.  It's a horrible decision, but its a matter of fact that most people still do so because they extend themselves beyond their means.  I personally think it's insanely mind boggling to carry a balance, and APR is completely insignificant to me, but I understand why it matters to an average American.  This community is more about building credit and not much emphasis on how to improve ones overall financial health.  I recommend checking out mr money mustache.

[mitchblue]

I have to agree with the "emercengy type situations.." Life happens, and sometimes that low APR comes in handy. And not everything is about rewards. A couple years ago I needed a laptop, and money was tight - I just needed to pay it off over time - 10 months. Low APR comes in handy.. So it's not wrong. Situations vary.

[Anonymous]

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@UpperNwGuy wrote:

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Why do you care if a bank or CU values its business relationship with you?  This is about money, not about personal feelings.  I always have a couple of very low APR cards in reserve in case I ever find myself in a financial bind, but I don't care what APR is on the rewards cards.  I will never carry a balance on those cards.  I have them to earn rewards, and as long as the rewards keep flowing, I frankly don't care if the bank values its relationship with me.

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+1   For those that view low APR as indicating a good relationship, suppose instead you got a normal APR, but frequent letters from the VP saying "You are one of our best customers and we really value the relationship and hope it continues for a very long time.   As a token of our appreciation, you will now see a gold star on every statement!"

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My guess is that that wouldn't do the trick for at least some of you, which means that the low APR must have some intrinsic value to you, such as the frequently cited "Life happens" case.    I'm not too sure of the value of that either, except for very short term, as with extended emergencies cards will be balance chased or closed

[UpperNwGuy]

We are definitely talking past each other on this thread.  I don't think anybody on here disagrees with the notion that "life happens."  Where we disagree is how to prepare for that possibility.

My card with the largest credit limit also has the lowest APR.  It doesn't have any rewards whatsoever, so I only use it a few times a year to keep it active. Having that card available for emergencies means that I can stop worrying about APRs when I build my optimal portfolio of rewards cards.  Yes, you can have it both ways!

Looping back to the original discussion about the new 2% PayPal card, I would contend that this is not a card for "life happens."  It's a card for decent across-the-board rewards to be used at times when you are debt free.  If someone needs to carry a balance, it should not be on this card.  A well prepared myFico reader should already have other cards in their portfolio for "life happens" emergencies.

[Anonymous]

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@UpperNwGuy wrote:

We are definitely talking past each other on this thread.  I don't think anybody on here disagrees with the notion that "life happens."  Where we disagree is how to prepare for that possibility.

My card with the largest credit limit also has the lowest APR.  It doesn't have any rewards whatsoever, so I only use it a few times a year to keep it active. Having that card available for emergencies means that I can stop worrying about APRs when I build my optimal portfolio of rewards cards.  Yes, you can have it both ways!

Looping back to the original discussion about the new 2% PayPal card, I would contend that this is not a card for "life happens."  It's a card for decent across-the-board rewards to be used at times when you are debt free.  If someone needs to carry a balance, it should not be on this card.  A well prepared myFico reader should already have other cards in their portfolio for "life happens" emergencies.

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This is exactly what I do! I have a no frills, low APR/high limit visa from a local credit union that i keep just for these reasons. and had to use last year when life happened to me. (which in turn after two months was balance transfered and paid off in two more months.) For day to day spending, that card is dead to me. An occasional Starbucs card refill on it so my CU knows I'm still alive, but otherwise it never see the light of day. But, if life happens, in general it's the first one I'll use.