Wednesday, May 20, 2009

Good explanation on "Why Credit Card Companies Are So Mean"

I like Daniel Indiviglio's explanation on Why Credit Card Companies Are So Mean.

Technorati tags: Credit, Card, interest

1 comment:

Eric Holcombe said...

You really have to read the comments following the story to get the whole story.

I'm one of those "deadbeats" who pays off every month. I feel no guilt because I know they make money on every transaction.

I also have a card that began many years ago as a 9.9% "fixed" rate card. The going rate then was 12-13%. I haven't used it since two years ago when they went to 12.5% for purchases soon after I had discovered some fraudulent charges being made to the card and made a claim (After two months in a row of this (probably $200 total was in question), I requested a new number be assigned to the account which stopped the activity). I believe it has since increased to 16% for purchases. I received a notice this week the cash advance rate was climbing to 25%.

My wife and I use a joint account card daily with the same company. The interest rate is 4.99% for purchases and 19.8% for cash. I believe those are the rates we began with several years ago. It's the "deadbeat" one we pay off every month.

So, shouldn't Jake get the same interest rate by himself as he does when combined with his "unemployed" homeschooler wife when both have credit scores of 790-810? Go figure.