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Posted on 3/8/25 at 8:13 pm to GumboPot
quote:
the federal government will have to absorb some of that risk. Not good.
Correct. This isn't about lower CC rates, it's about who pays the bills for irresponsible borrowers. Pouring another mountain of debt onto the federal govt ledgers, to be monetized at some future date by the Federal Reserve.
Posted on 3/8/25 at 8:35 pm to aubiecat
They could do a mud wrestling PPV and be set for life.
Posted on 3/8/25 at 8:53 pm to deltaland
Deltaland you are in the perfect position to really take advantage of a credit card. Your collateralized line of credit will allow you to pay off your credit card on the due date and incur no interest expense on the credit card. Tomorrow if not tonight start looking for an unlimited cash back cc that pays 1.5-2% cash back. I use Capital One but other companies do this too.
The credit limit on this card will need to be as high as they will allow you and may start at say $50,000. As you use the card the CC company will increase your credit line.
Contact all your farm vendors like the seed and chemical suppliers,the COOP, etc and tell them you want to pay all invoices with a credit card. They may balk at first due to “fees” but tell them it is a fraud issue for you and the fee ensures agains fraud and also you can pay on delivery vs. net 30.
Lets say you buy $1.5M in supplies during the year and you get a 2% cash back. That’s $30,000 to you tax free and you use your line of credit to pay the credit card company on the due date. The CC company will likely start you at a line of credit less than you’d like but as you use the card your limit will grow and could be as high as $1M.
I read your posts and you are a smart guy, Be real smart and use CC’s as the powerful tool they can be to put money in your pocket. By the way check and even ACH fraud is rampant and take it from someone who has been defrauded by high and low tech fraud use of CC’s is the safest way to ensure against fraud.
The credit limit on this card will need to be as high as they will allow you and may start at say $50,000. As you use the card the CC company will increase your credit line.
Contact all your farm vendors like the seed and chemical suppliers,the COOP, etc and tell them you want to pay all invoices with a credit card. They may balk at first due to “fees” but tell them it is a fraud issue for you and the fee ensures agains fraud and also you can pay on delivery vs. net 30.
Lets say you buy $1.5M in supplies during the year and you get a 2% cash back. That’s $30,000 to you tax free and you use your line of credit to pay the credit card company on the due date. The CC company will likely start you at a line of credit less than you’d like but as you use the card your limit will grow and could be as high as $1M.
I read your posts and you are a smart guy, Be real smart and use CC’s as the powerful tool they can be to put money in your pocket. By the way check and even ACH fraud is rampant and take it from someone who has been defrauded by high and low tech fraud use of CC’s is the safest way to ensure against fraud.
Posted on 3/8/25 at 8:55 pm to GumboPot
quote:
The danger here is when the banking lobbyists tell Anna and AOC that their customer base will decrease with theses CC interest rate caps so in order to maintain our high risk CC holders with lower rates the federal government will have to absorb some of that risk. Not good.
Bingo. Banks aren’t going to take risk without either appropriate risk premiums or a bank stop on default. That’s further complicated by the lack of a secondary finance market for credit cards because it’s unsecured debt.
Posted on 3/8/25 at 8:57 pm to aubiecat
I love the high rates. The CC give generous rewards knowing they just need the bottom half of idiots not to pay their cards on time.
Posted on 3/8/25 at 8:57 pm to Longhorn Actual
quote:
If you don't want high interest rates, don't be a high risk borrower.
But this isn’t actually the case when it comes to credit cards. The rates are attached to the card applied for rather than the specific borrower’s risk profile. I have an 800+ score, have never missed a payment, and am in a high tax bracket and I’d get the same CC rates as others if I applied for a low level card like CapOne Quicksilver. They’re not using interest as a function of risk with most of these cards.
I’m not saying I agree with capping interest rates, but I don’t think this argument holds water in the current CC environment.
Posted on 3/8/25 at 9:09 pm to Dixie Normus
I could care less about the interest rate. It could be 100%. Pay it off every month.
Now are the rates too high and predatory. Yes. People who pay the minimum are getting screwed. But then again they are screwing themselves. The rate could max out at say 10-12% but that will severely limit the number of people who can qualify.
Unfortunately so many people are ignorant of how money works.
Now are the rates too high and predatory. Yes. People who pay the minimum are getting screwed. But then again they are screwing themselves. The rate could max out at say 10-12% but that will severely limit the number of people who can qualify.
Unfortunately so many people are ignorant of how money works.
Posted on 3/8/25 at 9:09 pm to Dixie Normus
quote:I have a 825-850 and my interest rate is 0.0%. Because I don't buy things I can't afford.
But this isn’t actually the case when it comes to credit cards. The rates are attached to the card applied for rather than the specific borrower’s risk profile. I have an 800+ score, have never missed a payment, and am in a high tax bracket and I’d get the same CC rates as others if I applied for a low level card like CapOne Quicksilver. They’re not using interest as a function of risk with most of these cards.
Also, from a 2 minute Google search...
quote:
The average credit card interest rate in America is currently 24.20%. Rates can vary based on creditworthiness, with lower rates typically available to those with better credit scores.
quote:
Card issuers are in the business of making a profit, but it also comes down to the financial risk they are taking.
quote:
The reason for the seemingly high rates goes beyond corporate profit or greed: It’s about risk to the lender.
quote:
In finance, generally the more risk you take, the better potential payoff you expect. For banks and other card issuers, credit cards are decidedly risky because lots of people pay late or don’t pay at all. So issuers charge high interest rates to compensate for that risk.
quote:
That’s why credit card interest rates are expressed as a range, to reflect rates charged to consumers with excellent, average and poor credit.
If banks trust you more, they think their risk is less and they charge you a lower rate.
quote:
Previously, an increase in new credit card accounts for people with lower credit scores generally led to a rise in average credit card interest rates, as people with subprime scores – less than 660 – are typically offered a higher rate due to a greater risk of default.
This post was edited on 3/8/25 at 9:10 pm
Posted on 3/8/25 at 9:14 pm to aubiecat
State issue. States have different usery laws and these things should be handled state to state. Interest rates are exorbinant. That's why I pay off credit cards month to month if not more often. I realzize not everyone can do that but living off of a credit card is stupid.
Posted on 3/8/25 at 9:18 pm to Diamondawg
Living off a credit card is very smart IF you pay it off every month and get like $5000 a month in cash back, tax free. Wake up.
Posted on 3/8/25 at 9:24 pm to Diamondawg
Well it does depend on circumstances and $500 a month tax free isn’t too bad either if you were going to buy all the stuff anyway. If you have a business and a collateralized line of credit it’s a no brainer.
Posted on 3/8/25 at 9:25 pm to dovehunter
quote:That's fine. But these idiots make minimum payments and find themselves in all kind of crap. Never touch the premium - just pay probably what is less than the interest charge. You knew what I was talking about. I have a small business. I know how cash back works.
Living off a credit card is very smart IF you pay it off every month and get like $5000 a month in cash back, tax free. Wake up
Posted on 3/8/25 at 9:31 pm to tigeralum06
This 100%. Interest caps just mean poor people won't have access to credit, some FeEl tHe BuRn types in gov will crusade to make the government fill that role
Posted on 3/8/25 at 9:31 pm to Diamondawg
I understand what you are saying. A fairly high percentage of people pay off their CC’s every month. Of course those aren’t the drags on the economy we were originally talking about.
I would like to see the government take better care of our citizens vs. sending all the money we send to foreign countries who hate us. This could be a slippery slope as there is no collateral with credit cards and if the government agrees to insure this money there is no recoverable recourse.
I would like to see the government take better care of our citizens vs. sending all the money we send to foreign countries who hate us. This could be a slippery slope as there is no collateral with credit cards and if the government agrees to insure this money there is no recoverable recourse.
Posted on 3/8/25 at 9:51 pm to TheHarahanian
quote:Good
The result will be no credit cards if you don’t meet criteria established by the card companies. Instead of high interest credit, no credit at all.
Posted on 3/8/25 at 10:05 pm to beaux duke
quote:
also i agree. too many people get trapped by credit cards. yes, a lot if it is due to their own dumbassery but still
No, there's no "but still".
Yes, there are legitimate instances where someone ends up needing to float an unexpected expense on their card for a bit, but I don't think that's what we are seeing. I believe (and I've said this for a couple of years now) that the majority of credit card debt we've been seeing are consumers trying to continue to live their same lifestyle by offsetting inflation onto their credit cards. One measure of this is that the of the fastest growing sectors since COVID, in the face of continuing inflation, has been hospitality & leisure.
Common sense says that if your credit card is charging 20+% on your carried balance, you stop using the fricking card and get hellbent on paying the debt off. Any "fix" the federal government tries to create is likely to end up causing consumers to create even MORE debt, and that's the last thing we need as GDP growth has gone from being somewhat dependent on new debt creation, to dependent on it, to now it being the only reason GDP grows.
The last thing we need is yet another government program kicking that can down the road instead of consumers having to learn hard lessons. Why? Because math doesn't care, so eventually those lessons are going to be learned whether it's from debt-ridden consumers having to sell off assets and change lifestyles in order to pay off their debt, consumers filing bankruptcy or the currency crashing under the debt load.
It's not a matter of "if", it's a matter of "when".
Posted on 3/8/25 at 10:08 pm to aubiecat
The ultimate goal here is to have the government force banks to offer the same amount of credit at the same interest rates to everyone regardless of credit worthiness. Then, when the banks lose their asses, the government bails them out. The 800 credit score people will have been paying their bills on time while AOC's constituents will have defaulted. It's just a roundabout way to transfer wealth from responsible people and net contributors to the Treasury to irresponsible shitbirds.
Posted on 3/8/25 at 10:15 pm to aubiecat
I always find this push fascinating because if successful, the people they'll frick the most are the people they claim to want to help.
Who exactly do they think will be the first to no longer qualify for credit cards if they are successful putting in caps?
Who exactly do they think will be the first to no longer qualify for credit cards if they are successful putting in caps?
Posted on 3/8/25 at 10:17 pm to Dixie Normus
quote:Well, if you're stupid enough to do that with an 800 score, then whose fault is that?
But this isn’t actually the case when it comes to credit cards. The rates are attached to the card applied for rather than the specific borrower’s risk profile. I have an 800+ score, have never missed a payment, and am in a high tax bracket and I’d get the same CC rates as others if I applied for a low level card like CapOne Quicksilver.
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