# The Eighty Percent APR Credit Card. You Heard Me! 80%!! **URL:** \ **Category:** The BBQ Pit\ **Created:** [October 21, 2009, 3:19am UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572 "2009-10-21T03:19:18Z")\ **Posts on this page:** 17\ **Page:** 4
**Author:** ![The\_Lurker\_Above](https://avatars.discourse-cdn.com/v4/letter/t/dc4da7/32.png) [@The\_Lurker\_Above](https://boards.straightdope.com/u/The_Lurker_Above)\ **Post date:** [October 23, 2009, 3:08am UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/61 "2009-10-23T03:08:15Z")
> [@Bryan\_Ekers](#): > > Heck, my bank just _gave_ me a line of credit one day. Now I can casually get up $10,000 at 6.5%. > > Of course, I’m Canadian and our banks are not insane. I’m not sure those to sentance belong in the same post 😉 That’s not quite as nuts as giving my student-self a credit card for 5 grand. I was expecting to get $500 limit or so. What kind of student can afford 5 grand in credit card debt? ---
**Author:** ![Fell\_through\_the\_Ice](https://avatars.discourse-cdn.com/v4/letter/f/a9adbd/32.png) [@Fell\_through\_the\_Ice](https://boards.straightdope.com/u/Fell_through_the_Ice)\ **Post date:** [October 23, 2009, 3:12pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/62 "2009-10-23T15:12:18Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Initial fees of ~$200 are pretty much standard for these “credit builder” accounts. They are? Even secured cards? ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 23, 2009, 3:20pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/63 "2009-10-23T15:20:35Z")
> [@The\_Lurker\_Above](#): > > I’m not sure those to sentance belong in the same post 😉 > > That’s not quite as nuts as giving my student-self a credit card for 5 grand. I was expecting to get $500 limit or so. What kind of student can afford 5 grand in credit card debt? Well, business majors, of course. Art history, not so much. ---
**Author:** ![Anne\_Neville](https://avatars.discourse-cdn.com/v4/letter/a/b9e5f3/32.png) [@Anne\_Neville](https://boards.straightdope.com/u/Anne_Neville)\ **Post date:** [October 23, 2009, 3:34pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/64 "2009-10-23T15:34:01Z")
I think finance and budgeting could be incorporated into middle school home economics classes. My home ec classes covered cooking, sewing, and child care. Not many people sew their own clothes these days, so I propose we drop sewing and put in personal finance. If a school wanted to offer sewing as an elective for high school students, that would be fine, but I think it’s more important that everybody learn the basics of personal finance than that everybody learn to use a sewing machine. It would save on equipment costs, too. Doing it in home economics also has the advantage that everybody (at least in my middle school, they did) takes the same home economics class. Not everybody takes the same math class. If you taught it in math, there would be a temptation to say, for example, “the advanced kids don’t need this, they know the math”. There’s more to it than just knowing how to do the math. **Mindfield** , being a reasonably intelligent adult, presumably knows how to add and subtract decimals. That’s all the math that’s needed for balancing a checkbook. But he (she?) still doesn’t understand how or why you would balance a checkbook. A lack of math skills isn’t the only problem here. Some people will say “the parents should teach the kids that stuff”. To that I say, “How’s that working out for you?” That’s what we’re doing now, and it’s not working. Clearly we need to do something other than what we’re doing now. Of course, what we’re doing now is working just fine from the perspective of the banks and credit card companies, if not from that of individuals. I think it would be an uphill battle to get personal finance taught in schools, for this reason. ---
**Author:** ![furt](https://avatars.discourse-cdn.com/v4/letter/f/439d5e/32.png) [@furt](https://boards.straightdope.com/u/furt)\ **Post date:** [October 23, 2009, 4:51pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/65 "2009-10-23T16:51:19Z")
> [@Fell\_through\_the\_Ice](#): > > They are? Even secured cards? That would be one of the worse ones, but it’s not unheard of. If you’re dumb and don’t shop around, you might well get that. > [@The\_Lurker\_Above](#): > > That’s not quite as nuts as giving my student-self a credit card for 5 grand. I was expecting to get $500 limit or so. What kind of student can afford 5 grand in credit card debt? Leaving all ethical questions aside (which is what many of these banks do), whether or not the students can afford it is irrelevant. What matters is whether or not the bank will make money on the deal. Just for fun, let’s do some math. ShittyCardCo issues 3 5k cards to 3 people, all of whom max it out immediately. The card has a $50 annual fee, and 28% interest. Student #1 has the card for two years, then pays it off and closes. Even if she never misses a payment or pays any extra fees, in those 2 years, she’ll still have paid $2000 in interest and fees. Student #2 makes three payments on the card so he can’t be prosecuted for fraud, then never sends a dime. Card Co sells the account balance to a collector for $250. But student #3 … well she is a minimum-payment gal. And most every month she sends in $125. Months she misses, there’s a late-payment fee. She’s gonna need ten years to pay off that card, and by then it will cost her ten grand in interest. 1/3 of the students defaulted, but the CardCo made $3000. And very, very few students are like #1 or #2. Most keep them a while, making payments. When they default, it’s after several years of payments. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [October 23, 2009, 4:53pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/66 "2009-10-23T16:53:07Z")
We actually did a eight grade high school Civics module around personal finance. They gave us “checkbooks” - sent us “bills” and gave us “paychecks” We had to budget for the stuff that wasn’t in bills. Towards the end we got a credit card and the interest lesson - but since interest is pretty complex math for the remedial eighth grade set - there wasn’t a lot of depth there for MOST kids - they just didn’t “get” it (and I suspect that situation hasn’t gotten better). Those of us that could do an interest equation did get it. I thought it was a wonderful lesson - it fit in with some other things we learned that year (that was the year we did career exploration in Civics as well - what do you want to be when you grow up - go research it.) ---
**Author:** ![BlinkingDuck](https://avatars.discourse-cdn.com/v4/letter/b/eada6e/32.png) [@BlinkingDuck](https://boards.straightdope.com/u/BlinkingDuck)\ **Post date:** [October 23, 2009, 5:48pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/67 "2009-10-23T17:48:46Z")
> [@Anaamika](#): > > All of that won’t do any good unless we start teaching our kids finance. I always hear about people making fun of others who have made poor financial choices and I always wonder - where were they supposed to learn the right choices from? If you don’t learn it from your parents, who else do you learn it from? > > I think we should have basic finance courses in high school. This is a credit card, this is interest, this is how you pay for it. This is a check. This is how you write one out! This is how you balance your checkings account. Here is a sample household budget. Here is a sample of overextended credit. You (generic you) probably think I am being overly anal; however, I know lots of people who just never did this stuff and have to learn it all on the fly. > > And that doesn’t even begin to touch big purchases like cars or houses. I haven’t the remotest idea how to go about buying a house. Thankfully i see there are 'first time home buyer" courses which I will take when the time comes. But the market is not geared toward the buyer and one constantly has to watch out for pitfalls. > > We have to educate before we can get down to yelling at people for poor choices. One more thing. I’d say at least a majority of the people I know with bad credit made poor choices when young - 18-23 YO I would say. Yet it chases them for years and years. Again, education needs to start early. One of my favorite teaching stories is I was teaching a ‘liberal arts’ math class - for college students that needed a math class to graduate but only 1. As an example of interest rates and amortization I used mortgages. The next day an older student came to me before class and asked me to look at her mortgage statement and her calculations because she wasn’t matching the bank. Turns out the interest rate she was supposed to be charged wasn’t…and she was being charged a fourth of a percent higher. She contacted the bank and after some deliberation, they admitted the error and refunded the overpay. It was something like several thousand dollars. She (the student) was extremely happy 🙂 ---
**Author:** ![The\_Lurker\_Above](https://avatars.discourse-cdn.com/v4/letter/t/dc4da7/32.png) [@The\_Lurker\_Above](https://boards.straightdope.com/u/The_Lurker_Above)\ **Post date:** [October 23, 2009, 6:31pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/68 "2009-10-23T18:31:51Z")
> [@furt](#): > > Just for fun, let’s do some math. ShittyCardCo issues 3 5k cards to 3 people, all of whom max it out immediately. The card has a $50 annual fee, and 28% interest. > > \ > > 1/3 of the students defaulted, but the CardCo made $3000. > > And very, very few students are like #1 or #2. Most keep them a while, making payments. When they default, it’s after several years of payments. I just check that card’s interest rate (I’ve never needed to know before) and currently it’s either 20% or 24% depending on your credit rating and it’s no fee. That explains how the bank’s making money. I see the bank’s point of vew, but it still seems nuts to give someone with essentially zero income (and big tuition expenses) 5k worth of on-demand credit. ---
**Author:** ![furt](https://avatars.discourse-cdn.com/v4/letter/f/439d5e/32.png) [@furt](https://boards.straightdope.com/u/furt)\ **Post date:** [October 23, 2009, 8:18pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/69 "2009-10-23T20:18:33Z")
> [@The\_Lurker\_Above](#): > > I just check that card’s interest rate (I’ve never needed to know before) and currently it’s either 20% or 24% depending on your credit rating and it’s no fee. No _annual_ fee – they still get $30 or $40 every time you’re late with a payment, bounce a check or go over the limit (which students are gonna do). Heck, they probably also charge a few bucks if you wanna pay over the phone. > [@](#): > > I see the bank’s point of vew, but it still seems nuts to give someone with essentially zero income (and big tuition expenses) 5k worth of on-demand credit. Well, most students do have _some_ income. That 10 hour a week pizza job will give you enough to make a minimum payment each month, or you can get $100 off the folks now and then, or use the money from selling your textbooks or from grandma. You won’t pay them off for years … but they don’t _want_ you too. Some people carry balances on credit cards for _decades_, sending in minimum payments all along, paying thousands in interest. If they can get a few people hooked on their card early, they have an income stream that will more than pay for the defaults. ---
**Author:** ![Arnold\_Winkelried](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Arnold\_Winkelried](https://boards.straightdope.com/u/Arnold_Winkelried)\ **Post date:** [October 23, 2009, 10:53pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/70 "2009-10-23T22:53:33Z")
If a school teaches personal finance, lesson number 1 should be: If you buy something with your credit card (let’s say you spend $150 for clothes), that amount is **immediately** deducted from your bank account balance, same as if you payed with a check or with your debit card. The money is no more. It has ceased to be. It has left your checking account, rung down the curtain and joined the choir invisible. It is EX-MONEY! ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [October 24, 2009, 12:34am UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/71 "2009-10-24T00:34:44Z")
Y’know, this kind of stuff is part of what “home economics” really is: how to finance, manage, and operate a home. Somehow when I was in high school, home economics got equated to “cooking classes” and only girls were allowed to take it. (What? Boys don’t need to know how to cook? But that’s another issue…) ---
**Author:** ![Zoe](https://avatars.discourse-cdn.com/v4/letter/z/a4c791/32.png) [@Zoe](https://boards.straightdope.com/u/Zoe)\ **Post date:** [October 25, 2009, 2:00am UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/72 "2009-10-25T02:00:20Z")
Credit cards are not like they were ten years ago. If you bought something and paid only the amount due each month, you could count on paying three times as much for the item before you got the account paid off. It was a hard lesson learned. It’s different now. There is a sucking wickedness out there. You may be in the middle of paying off your sweet little account at 14% interest when Monster Bank takes over. They let you know that if you are late on a payment, your interest rate will jump to 30%. You feel safe because you are having your payments withdrawn from the bank each month. Then you are notified that you didn’t make your payment last month. You can complain all the way to the top, but you didn’t have an arrangement with THEM to have money withdrawn from the bank. Therefore, your interest is 30%. Then a couple of months later, they devise a new contract which is impossible to understand. You were not a banking and finance major nor have you studied tax law. This contract was written for the purpose of confusing. Nevertheless, you notify them that you refuse the contract. They change the way that your interest is figured anyway. When you complain and explain that you “opted out,” you get laughed at. Six months later, another contract revision arrives. The cycle continues. I paid off all of my credit accounts several months ago. I still get contract revisions sent to me because those accounts are open. One of these banks is one of those that got bailed out. I also have had a relative, now deceased, who was on its Board of Directors at one time. I can’t tell you how I long to be able to pull strings and tell some people off who have been unkind to me. G-r-r-r-r-r. Once I called our State Attorney General’s Office and asked what our state usury laws were. The guy just told me to pay my bills! What a clod! ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 25, 2009, 2:57am UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/73 "2009-10-25T02:57:25Z")
Hey! Its about\* personal responsibility\*, young lady! Bankers (and their servants) are very big on personal responsibility! I mean, you act like its your money! ---
**Author:** ![furt](https://avatars.discourse-cdn.com/v4/letter/f/439d5e/32.png) [@furt](https://boards.straightdope.com/u/furt)\ **Post date:** [October 25, 2009, 2:59am UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/74 "2009-10-25T02:59:53Z")
> [@Sunspace](#): > > Y’know, this kind of stuff is part of what “home economics” really is: how to finance, manage, and operate a home. Somehow when I was in high school, home economics got equated to “cooking classes” and only girls were allowed to take it. (What? Boys don’t need to know how to cook? But that’s another issue…) If you don’t mind my asking, how old are you? Nowadays home ec is not often offered, and when it is it’s coed. My junior high in the mid-80’s required everyone to take it. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [October 25, 2009, 6:27pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/75 "2009-10-25T18:27:15Z")
> [@mhendo](#): > > I support the idea, but i wonder just how much more time we should be taking away from academic subjects in school. I’m teaching university undergraduates right now who can’t even put together a coherent sentence. > > Surely, if there’s one thing that parents should be teaching their children, it’s basic money management skills like this. Schools keep getting loaded with more and more parenting-type responsibilities, and i think it degrades the quality of education that children get. “Taking away from academic subjects”? I was taught compound interest in math which, last I checked, was an academic subject. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 25, 2009, 6:30pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/76 "2009-10-25T18:30:11Z")
> [@Fell\_through\_the\_Ice](#): > > They are? Even secured cards? Not secured cards, at least not from reputable issuers. I have a secured card (never bothered to get a card in college since I figured I’d get in heaps of debt) and I think the annual fee is like $29. ---
**Author:** ![mhendo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mhendo/32/3159_2.png) [@mhendo](https://boards.straightdope.com/u/mhendo)\ **Post date:** [October 25, 2009, 7:31pm UTC](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572/77 "2009-10-25T19:31:41Z")
> [@Nava](#): > > “Taking away from academic subjects”? I was taught compound interest in math which, last I checked, was an academic subject. Nice cherry-picking there. Here was the original list of things suggested for coverage in school: > [@Anaamika](#): > > This is a credit card, this is interest, this is how you pay for it. This is a check. This is how you write one out! This is how you balance your checkings account. Here is a sample household budget. Here is a sample of overextended credit. > > \ > > And that doesn’t even begin to touch big purchases like cars or houses. I haven’t the remotest idea how to go about buying a house. Thankfully i see there are 'first time home buyer" courses which I will take when the time comes. But the market is not geared toward the buyer and one constantly has to watch out for pitfalls. Many of those things are very useful to know. I’m even willing to entertain the idea that we should make a place for them in the school curriculum. But they are not academic subjects. [Previous page](https://boards.straightdope.com/t/the-eighty-percent-apr-credit-card-you-heard-me-80/514572.md?page=3)