Credit card interest rates

[Perd Hapley]

USAA sent me an offer in the mail for a "low-interest" credit card. It was 18.5%. Is that considered low in 2025, or is that just happy talk?

[Live Life]

Perhaps below chart from article will help - https://www.cardrates.com/advice/best-credit-card-interest-rates/

[Perd Hapley]

I guess I should check my privilege.

[Brad Johnson]

From what I can tell, 18.5% is pretty darned good. I've seen advertised rates high as 26% on some products.

Rate shopping cards was a huge thing back when my ex-wife dug us into a huge hole. I also became way too familiar with the "pay off your other card with our 12 month no interest checks" CC merry go round. It helped, sure, but the best thing was when I got back on my feet after the divorce and vowed to never, ever carry a balance again unless it was the absolute last resort.

Brad

[K Frame]

My Navy Federal Go Rewards card interest rate was 12.15% on my last statement.

It's actually dropped a little bit over the last couple of months. In December it was 12.65%.

Last June it was 13.15%.

My back up card, from Pennsylvania State Employees Credit Union, is sitting at 16.65%.

[zahc]

I never pay attention to the interest because I never pay it. I have probably 10 credit cards but I don't know the rate of any of them.

[Bogie]

I have always paid mine every two weeks...
 
Gonna probably switch that to monthly, just need to stay ahead.

[Kingcreek]

Credit card money is some of the most expensive money you will spend.
I haven’t paid CC interest in 30+ years.
I have 2 card accounts. When I cancelled my business card and my zero balance cabelas card my credit score dropped from 805 to 770. We paid off a short term new car loan around the same time.

[K Frame]

If it weren't for the ability to float things on my credit card I would have lost Seren 18 months ago.

Using the credit card did a couple of things for me.

1. It allowed me to pay for her treatments without continually dipping into my hardened savings (and then putting the money back in, the whole while losing income that that money would have generated).

2. It gave me float time when I was low on liquid cash in the middle of a month.

3. Gain lots and lots of reward points.

Through 18 months of treatments I was able to keep my running balance manageable. Was I able to pay it off every month? No. I've kept a running balance of a few hundred to a few thousand dollars month over month.

A few weeks ago I did tap into my savings for the first time because the balance was getting a bit higher than I liked.

Unfortunately, though, I was forced to skid it again today because Seren had a medical crisis and she's in the veterinary hospital, so that's another $5,000 on the card in one go.

But, unlike the dire predictions of so many barking moonbats, I've not been reduced to living in a scratched out hole in the ground and wearing soggy cardboard boxes because I ruined... RUINED!!!! my fiscal life by paying a few dollars of interest every month.

[Bogie]

I have two cards. One of them is a Bass Pro/Cabella's however it is spelled card...
 
A buddy of mine ran his business (a range and canoe rental, etc., kinda place).
 
That got him a free largest Yeti cooler that they sold. Got him a free "outfitter" base camp tent. Got him all sorts of fishing and shooting stuff.
 
Some folks like airline points. They use their cards to buy all their golf stuff.

[Ben]

Credit card money is some of the most expensive money you will spend.
I haven’t paid CC interest in 30+ years.
I have 2 card accounts. When I cancelled my business card and my zero balance cabelas card my credit score dropped from 805 to 770. We paid off a short term new car loan around the same time.

The whole relationship with credit scores just cracks me up. I only use credit cards because of points and as a safe "boomer" way to buy stuff, especially online.

I pay them off every month, but especially since retiring, my credit score will fluctuate between ~790-~820. When I was working, it never dropped below around 810. My score usually drops the month after I have a lot of stuff on the cards (I haven't figured out if it's by the individual card or combined cards or both). For instance, last month, my auto and home policies all came up at once, and they went on a single card (points!). Immediate drop in the score to 793 (from 812). I just got the notice a couple of days ago that I'm now back to 814 - two points higher than before the drop. The fact that I always pay off the balances monthly seems to have zero effect on my score.

I've also seen my score drop after a month where I put very little on my cards. It always seems to me that the more fiscally responsible that I am, the more it hurts my score. Which, I just don't give a *expletive deleted*it about it anymore, other than as a passing interest to see the "random" changes. Everything is paid off and I'm not buying anything else big in my life that I'm not paying cash for. 

[Brad Johnson]

My score is normally in the 817-822 range. A month after we did new HVAC units my score dropped to 780  even though I paid off the card a week after the purchase. A month later the score popped right back.

Brad

[Declaration Day]

I got myself in big trouble with credit when I was in my 20s. It took years to get it all cleaned up, but I did.  No, I did not file for bankruptcy. I lived without credit for a long time afterwards, partially because I didn't need it; I had my mortgage and reliable cars, so there was no need for it.

Today I have a couple of credit cards with rewards points. I use them and pay them off every week. On occasion, a higher expense comes up that forces to me to carry a balance, but never for more than two months. My credit score is only 670, but that's due to my short credit history (less than three years).

[cordex]

But, unlike the dire predictions of so many barking moonbats, I've not been reduced to living in a scratched out hole in the ground and wearing soggy cardboard boxes because I ruined... RUINED!!!! my fiscal life by paying a few dollars of interest every month.

You make good money. You are established in your career and home. You have significant savings. The only person that you have obligations to is your dog. You are in a position to make lots and lots of suboptimal or necessary but expensive decisions without really suffering significant consequences.

The fact that you regularly carry a balance and thrive is not an argument that carrying a balance is actually a positive thing. It is not even an argument that it is actually the best way for you to handle those financial decisions. It is simply a recognition that in your position at this point in your life, the expense of using a credit card in the way you do is not a drastic impact on your standard of living. You wouldn’t hurt too much if you used $1 bills to start your pellet stove, which doesn’t make it a good financial option or something to recommend to others.

I doubt that it is true that credit cards were the only option to treat Seren, however they were undoubtably the most convenient option. In your position there is no shame in paying for that convenience, any more than you should feel shame in paying a professional to do work around the house that earlier in your life you could and would have done yourself.

No one giving the very sound, general advice to avoid paying the extortionate credit card interest rates is saying that someone with your level of wealth is going to the poorhouse the first time you do so.

Those “barking moonbats” recommending to avoid carrying a balance on credit cards are not making a personal attack on you, and it remains excellent advice to people who are in a more precarious financial position than you.

[K Frame]

My score is normally in the 817-822 range. A month after we did new HVAC units my score dropped to 780  even though I paid off the card a week after the purchase. A month later the score popped right back.

Brad

That was because your credit line utilization rate spiked significantly.

When your credit line utilization rate went back down to where the FICO people like it and where you have historically maintained it, the algorithms recognized the momentary blip.

[K Frame]

"The fact that you regularly carry a balance and thrive is not an argument that carrying a balance is actually a positive thing."

I'm sorry, did I ever say, anywhere, that it was?

No, I didn't.

I very specifically pointed out that the Howler Monkeys of Doom who say that anyone who carries any balance at all has forever ruined their financial lives are full of *expletive deleted*it.

The HMODs very pointedly ignore what you pointed out and then also sidestepped -- that each individual's means are completely different.

[zahc]

What do we think about laws to cap interest rates?

Most jurisdictions have usury laws that would prevent CC from charging the rates they do. So they are all headquartered in Des Moines or some otherrandom place that specifically harbors them, and due to the magic of interstate commerce, they get away with charging 20% rates globally. There have been federal proposals to cap interest rates to something like 10%. I think even Trump proposed it at one point.

[cordex]

Who in this thread did you think you were addressing with your post?  Who is the howler monkey of doom or the barking moonbat?

I don’t think I sidestepped anything at all. I specifically pointed out that because of your means you can afford the luxury of using your credit card when it isn’t strictly the best choice, and you shouldn’t feel ashamed of choosing to bear the high convenience costs of a credit card balance. At the same time, people who are militantly against carrying a balance on a credit-card are absolutely mathematically correct.

You were once again straw-manning people who wisely recommend against depending on credit card balances. None of them were saying that because K-Frame does it he will end up penniless.