Building Credit - 29.99% interest rates

[Brian_Earl_Spilner]

With the exception of the 15%, they're pretty average. Typically a lender will have 3 or 4 tiers of rates and you're in the middle.

[californiaboy935]

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@Brian_Earl_Spilner wrote:

With the exception of the 15%, they're pretty average. Typically a lender will have 3 or 4 tiers of rates and you're in the middle.

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The 15% is for the UBS card surprisingly. WHich is my largest limit. Unicorn haha.

[Remedios]

Well, they would be pretty high if you were to carry a balance. 

However, that's only because you're a higher risk than someone who has 20 years worth of history.

While they are high, they are also normal for where you are right now. 

My original point is that your highest APR is only slightly below highest store cards APRs, and in line with multiple store cards. 

My Chase APRs are very high, because of credit seeking. My risk is also reflected in APR, only for a different reason. 

Just think about what they would be if there wasnt for rate reduction by Feds, and you'll get a better understanding what APR really represents 

[Anonymous]

Unless it's a single digit APR, they're all pretty awful. 

Store cards usually have 26-29.99% APRs. Major credit cards usually cap around 27%. 

[iced]

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@sccredit wrote:

When rebuilding or building credit the ability to obtain credit far outweighs the interest rates. My cards have interest rates of 27.24%, 24.71%, 21.49%. I don't ever carry a balance on any of them so the interest rates are irrelevant to me. However the responsible handling of these credit limits will lead to access to other credit lines with lower rates in the future. 

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This is a big part of it. Interest rates are meaningless if you're not carrying debt on cards month-to-month, and I honestly couldn't tell you what the APRs are on most of my cards.

From where I sit, if you're APR shopping to carry debt on a card, you've already made a wrong turn somewhere. Even when one does need to borrow, a loan is going to be far more favorable in interest than any card.

[Anonymous]

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@iced wrote:

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@sccredit wrote:

When rebuilding or building credit the ability to obtain credit far outweighs the interest rates. My cards have interest rates of 27.24%, 24.71%, 21.49%. I don't ever carry a balance on any of them so the interest rates are irrelevant to me. However the responsible handling of these credit limits will lead to access to other credit lines with lower rates in the future. 

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This is a big part of it. Interest rates are meaningless if you're not carrying debt on cards month-to-month, and I honestly couldn't tell you what the APRs are on most of my cards.

From where I sit, if you're APR shopping to carry debt on a card, you've already made a wrong turn somewhere. Even when one does need to borrow, a loan is going to be far more favorable in interest than any card.

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I don't know that I agree on the "a loan is going to be far more favorable in interest than any card" statement. Cards from major banks, sure, but 5.99% on my Platinum with a $15K limit and no new account or inquiries to deal with is more attractive than taking a personal loan and ending up with a likely higher rate since while I have excellent credit, I have low income. 

The problem is that many people do their balance carrying with a card with a 20%+ interest rate. 

[M_Smart007]

"The problem is that many people do their balance carrying with a card with a 20%+ interest rate."

I did that many years ago, until one day I did the math on what I was paying in interest ...

I then realized that the interest I was paying would pay a new car payment.

So I worked overtime to pay off the debt, and bought a new truck.

Back then the Payment was $213.XX a month with I forget how much down payment.

I guess that relates to building credit and Interest rates.

[Anonymous]

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@M_Smart007 wrote:

"The problem is that many people do their balance carrying with a card with a 20%+ interest rate."

I did that many years ago, until one day I did the math on what I was paying in interest ...

I then realized that the interest I was paying would pay a new car payment.

So I worked overtime to pay off the debt, and bought a new truck.

Back then the Payment was $213.XX a month with I forget how much down payment.

I guess that relates to building credit and Interest rates.

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Yeah I did stupid things with credit back then. My first card was BoA with 18.9% variable, second was US Bank with 1.9%+prime variable. You would think I would stop using the BoA card but you would be wrong. I continued to use that card despite my US Bank card having a much higher limit, lower interest rate, and better policies. I never sat down and did the math on how much interest I paid but seeing how my credit cards were only ever $0 balance when my grandmother paid them off for a birthday or Christmas gift, it was a lot... Many times I would pay the minimum and turn around and use the card the next day. 🤦‍♂️ 

[Revelate]

Depends on one's credit tier.

I started on this forum with a sub-600 score, tax lien, collection, smattering of lates, and zero positive history at that point.

Auto loan options at that time: 19.35%, and that was the best I got.

Credit card options: $500 limit and $59 AF for unsecured, or secured cards.  Those were some of the best options, FP and others were worse.

Personal loan: 126%, I kid you not, and it's still dinging me nearly 10 years later as a CFA.  /rude.

Things have changed but the fundamentals have not: everyone starts Tableau Rasa, and we either go up or down from there.  In my case I didn't have much use for credit (rental cars only really) and I wore the numbers off multiple BOFA debit cards in my lifetime, but I had some stupid mistakes dating back to 2000 and that impacted me both credit wise and financially and arguably in other things in life too.  I didn't know F'all at the time, and I was making enough money that I wasn't hurting (I've always been compensated pretty well to be fair compared to my educational attainment while still being an individual contributor of no particular note) and so I never really cared.

Wasn't until I was sitting in a Corner Bakery one Saturday with my best friend and we were talking about my trying to buy a house, and realizing I couldn't pay cash for it in Los Angeles at all, and that lead to a credit discussion... and that led to my finding this forum that evening and 10 years later still here in some form or fashion.

Nobody ever really talks about money, it's so taboo in our society still and credit ties into that as another financial resource.  You even see that in the forums even, so since the topic never comes up where are people supposed to learn it?  To be fair there's a lot more public education out there than there was 10 years ago, here and maybe one other forum and then a bunch of sites and other forums and things and now most banks give you some form of credit scoring... it's better now than it ever has been and sadly people still don't pay attention.

Ultimately credit is a resource, not building it and then not leveraging it is just self-**bleep**ing: simple napkin example, it's hard to buy a house in many places with cash given most people's savings, and that savings really should be elsewhere just looking at the stock market vs. mortgage rates over the past two decades, and then look at all the talking heads talking about how red-lining affected the generational wealth of African Americans and FWIW I suspect that is flatly unarguable... I don't have good financial tracking going back more than a decade but I got my poop mostly in a group when I started down that home buying journey and I've been making up for lost time ever since and those assets represent an acculumulation of wealth to be blunt, shuffling money from one side of my asset sheet to the other.

My opinion anyway.

[Anonymous]

While it's not ideal to have such high rates on CC's, i feel it's meant as a deterrent asmuch as anything else. I view it as a reason not to carry a balance. The unfortunate side is that many people are forced to for one reason or another. Which is why it would be nice if they were much lower, but that's not likely going to happen.