I just received a credit card “offer”, pre-approved no less, for a card with a 59% interest rate.
Assuming I’m not some test group recipient, that means there’s actually a crowd of people out there who think this is a good deal and take it.
Just to give you an idea here’s a table on the compounded interest of a $100 purchase:
year = amount
1 = $159.00
2 = $252.81
3 = $401.97
4 = $639.13
5 = $1,016.22
6 = $1,615.78
7 = $2,569.09
8 = $4,084.86
9 = $6,494.92
10 = $10,326.93
11 = $16,419.82
12 = $26,107.51
13 = $41,510.94
14 = $66,002.40
15 = $104,943.82
16 = $166,860.67
17 = $265,308.47
18 = $421,840.47
19 = $670,726.34
20 = $1,066,454.88
Further it has such goodies as a $5 per purchase fee. So a $0.50 pack of gum really costs $5.50, or a 3% interest on purchases, which ever is greater.
Return an item? $35 dollar fee. So if you return that pack of gum you’re now -$40 richer.
Needless to say I burst out laughing and destroyed the card.
Who the fuck is getting these things? My guess it’s aimed at trusting sorts who don’t read the fine print. Sharks, man, sharks,
Look at the rest of the fine print. I’ve gotten several of those since my bankruptcy. 59.9% interest. $300 limit, charge you $150 for the priviledge of giving you the card. Each time they increase your limit, they also charge you 50% of the increase as a fee. I think on one, there was a $15 charge for calling them to inquire about your account.
I got much much better offers from Capital One, and I took one of those.
I personally stick to cash, and debt for online things. There’s been a few times a credit card would be nice, but it’d be a pretty cool trick to over draw a wallet.
BTW I’m normally terrible with money, so I try to limit the damage I can do.
I’m assuming this is only useful, if at all, as a means of increasing really shit credit. However, it looks like Chimera found better options. I don’t know enough about credit scores to know how much having a card like this actually helps
I don’t like the risk involved with using debit, and cash doesn’t get me free plane tickets.
I can’t see any possible reason for this card to exist.
Except as a way of taking money from those who cannot read.
Let’s say you wanted to buy a $700 Television and you had shitty credit. With this card, it would cost you $150 to get the card, $200 to raise your limit to $700, $5 to buy the TV, and lets say $30 for two calls to enquire about your account. If you pay it off in a year, that would be $413 interest.
Grand Total for your $700 TV: $1498
You would be better off going to a loan shark. They don’t care if you have shitty credit, and probably don’t charge you $15 when you ask them how much you owe them. Even they have standards.
I got an offer a couple of years ago that the fees associated with obtaining the card added up to $479 out of a starting limit of $500.
Annual fee
Monthly maintenance fee
Increase limit request fee (opening the card was also requesting a limit increase)
Grant limit increase fee
Cash advance fee ( maintenance, request, increase fees were all cash advances)
I don’t remember what the interest was but it was over 69%.
:rolleyes::rolleyes::rolleyes:
Many years ago, long before they changed the bankruptcy laws to be more restrictive and before legislatures were very concerned with consumer protection, once you cleared bankruptcy, card companies would deluge you with offers. The idea supposedly was that they knew you couldn’t ‘take the cure’ for another 7 years so they had you on the hook regardless. Doesn’t really make any sense to me but this is supposed to be true. Maybe they had more effective collection agencies back then - Vinnie, Tony and ‘Knuckles’, LLC.
Indeed. I seem to remember there was a thread some years back where the common consensus of “What’s In Your Wallet” more often than not seemed to be their hand.
In the UK, consumer legislation mandates that the APR be the single largest piece of text on the letter. So for all the marketing bumpf about “manage your payments”, “financial freedom” and “maybe something to treat yourself!”, the one piece of information people should take away from one of the these cons is the vicious rate of interest.
What risks are those? If you run your debit card as a credit transaction, I’m pretty sure you have the same level of protection offered by a credit card.
Well, I did have some issues with them with my second payment on the card.
I mailed all my bills on Day N, which was a Friday, at about 1pm, from the main post office which is rright next door to the regional sorting center. Every. Other. Payment. Was received and processed 4 days later on Tuesday. For some inexplicable reason, Capital One claimed that they didn’t receive and process their payment for another 8 days, by which point they had charged me a $15 late fee.
My response was rather fast and furious. (Paraphrasing) “Each of these other payments to various parts of the country were received and processed four days after being mailed from the post office next to the regional sorting center, but you would have me believe that it somehow took 12 days to reach YOU? I am documenting this thoroughly and, should something like this ever happen again, I will be taking it up with the Minnesota Attorney General’s Office and filing a Consumer Complaint against Capital One.”
They backed out the charge, but I don’t know if I still have the ding on my credit rating.
Any risk that is already involved in using a credit card is magnified with a debit card because it’s your money instead of someone else’s. In addition to the issues highlighted in the linked article, there are often instances, such as hotel and gas purchases (I’m not certain that the latter is still an issue) in which a hold is placed on your account, thus increasing the risk of overdraft fees even if you have the necessary funds.
Plus, I don’t have to have all that cash sitting in a checking account. I can keep it in an account with a higher interest rate and transfer it directly to my CC company once a month. Of course I say that but don’t actually do it, since there are a few months’ pay rotting in my low-interest checking account.
Yup, there are times, strange as it is, where you temporarily get double-charged with debit cards. Once for the authorization, once for a hold on the funds. This can result on overdraft fees, even though you technically didn’t over-spend the account.
Don’t ask me why they pull that shit. They’ll probably give some technical explanation of why they need to do it, but it seems to me that it just increases their income from overdrafts.
I’m just seeing more inconvenience in having your money returned to you after an unauthorized use. If you maintain a second checking account, that really isn’t that big of a deal.
Regardless, the risk associated with debut cards is nothing when compared to the trouble associated with spending money you don’t have. People get into much more trouble with credit cards than they do with debit cards.
I’ve read here and elsewhere about Capital One’s nasty lending practices, abusive manipulation of credit scores, etc… However, when I went looking for a card that has low fees for vacationing in Europe, they were the only card that had no international transaction fee(!). They offered me very competitive interest rates, one year with no interest on purchases or balance transfers, and exceptionally clear statements or their own internal policies (i.e. you get one late payment per year before they raise interest rates, and defaults on other cards will not raise your interest rates).
I don’t know if they’ve changed, or if my credit score gets me better treatment. In my hands, they’ve been a peach to deal with.