Absolutely Insane Credit Card Interest Rate

Debate/ Discussion

For some context:

A year ago I got a Best Buy credit card to make a large, planned, purchase when we bought a home.

There was a promotional cash-back incentive of 20% the particular weekend and that amounted to $500 in free money.

I paid the balance in full as soon as I could. I had the cash readily available, but took advantage of the lucrative rewards I would definitely use. It actually got us a free TV.

I didn’t know what the APR was on this credit card until this morning and I was shocked.

For reference: I’m a 40 year old with an 800-820 credit score depending on which one you check.

If I had paid the $40 minimum payment, the balance would NEVER be paid off. If I had only paid $55 a month, it would take 10 years and I would have paid ~$6550 for the $2000 purchase.

Be careful with these insane interest rates.

in FluentInFinanceby OG_Cryptkeeper

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Davec433

I’m always surprised APR this high is legal.

KylonRenKardashian

Contributor

tbf, high interest rates results in lower inflation due to less money creation via fractional reserve banking (loans)

EuropeanModel

Someone always (tries to) finds a way to spin it. Does it really help the economy to pay 30% interest?

[GIF]

DLS0314

Arguably across the board when interest rates are high people spend less money which drives prices down

KylonRenKardashian

Contributor

Yes.

example: housing prices.

when interest rates are low people up-bid each other to the extreme driving up prices with newly created money which adds to the money supply.

it's supply & demand.

less demand increases supply which lowers prices.

EuropeanModel

Oh, all these Nobel prize winners in Economics were wrong. Thank you for sharing the secrets.

KylonRenKardashian

Contributor

lmao what are you even talking about?

raising interest rates is literally the standard move when inflation is too high.

how do you think new money is created? it's called the fractional reserve banking system for a reason.

EuropeanModel

Please don’t insult me with buzz words every 7 year old can look up in 15 secs.

This thread is about absurd interest rates on a credit card (aka predatory lending) and not fighting inflation.

KylonRenKardashian

Contributor

tell me you don't know how money is created without telling me that you don't know how money is created.

interest rates in a non-fractional reserve banking system are the equivalent to 100%

30% interest rates still encourage inflation, just at a slower rate.

are you someone who complains about inflation?