Why Are Credit Card Rates Going Down?

sputNick · 12:21 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.

fffresh · 02:30 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 · 04:08 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 · 03:04 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 · 07:30 PM

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

Lately I only read about people getting screwed by rising up the APR into the sky.

JEFF COGA · 03:32 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

12:21 AM	#1
sputNick Gold Member Join Date: Oct 2008 Location: Midwest Posts: 41	Why Are Credit Card Rates Going Down? 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.

07:30 PM	#5
Floppster Centurion Member Join Date: Sep 2008 Location: US Posts: 189	Wow, that is the first time that people complain about lower rates Lately I only read about people getting screwed by rising up the APR into the sky. __________________ Intellectuals solve problems. Geniuses prevent them. - Albert Einstein 1879-1955

03:32 PM	#6
JEFF COGA Gold Member Join Date: Aug 2008 Location: Los Angeles Posts: 33	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 - Get the hottest deals in Southern Cali www.SoCalBargainProperties.com -Want to learn real estate? Learn while your Earn... www.SoCalRedevelopmentTeam.com

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02:30 PM	#2
fffresh Centurion Member Join Date: Apr 2008 Location: the edge of the world Posts: 412	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.

04:08 PM	#3
sputNick Gold Member Join Date: Oct 2008 Location: Midwest Posts: 41	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.

03:04 PM	#4
vest Banned Join Date: Oct 2008 Location: London Posts: 2	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