On Sun, 5 Dec 1999 EvMick@aol.com wrote:
> I wrote:
> > Though you now see some competition starting to push the rates
> > down during "introductory" periods, they rapidly revert to a higher level.
> Do what I do. 'Surf' the interest. That is take of advantage of the
> 'teasers' then when it goes up...pay it off and get a new 'teaser'.
Yes but its a pain-in-the-papoochka strategy. It ought to be easier for the cardholders to act collectively and send letters to the bank telling them if they raise the rates above X% they will lose their business. Logically, with reliable cardholders, the banks should be able to make money at something like 2-3% above mortgage rates (since these are "unsecured" loans). So that means a rate of 9-10% should be about right for both parties. The companies that offer you the 3-4% intro rates are probably losing money (or breaking even if you factor in the payback they get from the seller), but the probably expect to make it back in the long run if they can retain you as a customer.
Maybe we need an ExtroBank that exists to serve the needs of the bank members or stockholders rather than the needs of the some bloated bureaucracy with "solid" buildings someplace. My impression was that credit unions were supposed to work along these lines. Does anyone know if credit unions have cards that have lower rates?