Why Are Credit Card Rates Going Down?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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sputNick
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Why Are Credit Card Rates Going Down?

Postby sputNick » Tue Oct 21, 2008 3:21 am

My interest on both of my cards has been voluntarily lowered by the CC companies during the past year. Why are they giving me lower A.P.R. it can't be out of the 'goodness of their heart' so I'd like to know what is going on here. My parents have said the same about their cards too. Doesn't this contradict the economy? I thought interest was going up on everything.


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fffresh
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Postby fffresh » Tue Oct 21, 2008 5:30 pm

I wouldn't view it as rates going low but rather to reasonable levels. The 15% to 25% and up was completely absurd. Rates in the 5% to 12% are more what they should be anyway.

When there are credit unions and legitimate banking institutions offering reasonable rates the companies that weren't simply had to follow their footsteps in order to remain competitive.

sputNick
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Postby sputNick » Tue Oct 21, 2008 7:08 pm

I guess that makes sense and I would expect them to offer lower rates to new cardmembers. I was just surprised they did it to existing cardmembers too.

vest
 
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Postby vest » Fri Nov 28, 2008 5:04 pm

Hi,

I think because of the credit crunch, the government is trying to protect us by lowering the interest rates. Some of the benefits of that is the lowering of your APR.

vest

Floppster
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Postby Floppster » Sun Nov 30, 2008 9:30 pm

Wow, that is the first time that people complain about lower rates :D

Lately I only read about people getting screwed by rising up the APR into the sky.
Intellectuals solve problems. Geniuses prevent them.
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JEFF COGA
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Postby JEFF COGA » Wed Dec 03, 2008 5:32 pm

Rates are only lowered for 3 reasons...

1. You have good credit... with small balance. CC companies do not want to lose you to another CC company, via balance transfer (you're giving liquidity in this credit crises)

2. They are doing a switch and bait move... changing your interest rates from a fixed rate to a variable rate. Currently the variable rates are lower then the fixed rates... just watch when the new administration comes in and jacks up the interest rates to control inflation.

3. Another bait and switch... they changed the terms on your default, late, and any other fees to protect themselves "jsut in case" you default

or it might be a combination
Jeff Coga
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