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Credit interest rates are low for those who have access and the ability to carefully utilize credit. Balance transfer and introductory offers are as low as they

Credit interest rates are low for those who have access and the ability to carefully utilize credit. Balance transfer and introductory offers are as low as they've ever been and you can get away with paying 4% interest annually, occasionally even 3%. That's competitive with the best mortgage rates! But "Standard APRs" are crazy high at around 14-18%. I have never understood why credit rates are so high compared to literally any other type of borrowing. I also don't understand how standard rates are sky high while promotional rates are near the rock bottom. It's baffling. But it's helped me manage big sums of debts during a couple of professional transitions I've gone through over the years. Without those 3-5% balance transfers I would still be deeply in debt today.

whatshisface 7y ago
They're high because there's no collateral. When people default on credit cards the money is just gone, when people default on mortgages it's as if the bank owned the house and was renting to them.
thephyber 7y ago
> don't understand how standard rates are sky high while promotional rates are near the rock bottom. Promo rates are the bank's marketing department paying to hook in the card holder on the probability that they will use the card for a long time. The standard rate largely factors in the cost of doing transactions (shared with the merchant percentage) and covering the risk of default. The 14-18% rates go to 24%+ if the card holder moves to a higher risk class (recently defaulted on another card, missing payment dates, etc).