Question: This came in the mail this morning — big envelope with “New LOWER Interest Rates *Are* Here!” – from Discover Card. I figured – “it’s about time!” – I don’t use your card much because of your interest rates…
So I read…
Smart Rate[SM] – A new program that lets you lower your interest rate!
—> *IF* you’ve spent $1,000 in the last year.
*This* is incentive?
Right now most Visa/Master Card companies are offering rates as low as 13% to customers without requiring them to spend more. I don’t use my Discover Card much, mostly because of the insane 19.8% rate they stick on it. Both my Master Card and Visa have decreased their rates in the last year – I’m paying 14.90% right now.
But, Discover has decided that although I’ve never missed a payment, and have been a cardholder for 5 years, I don’t merit the same incentive as other might to use their card more. Moreover, they *are* willing to lower their rates, ubt only for about 1/5th of their customer base…
Blech.
OK, I realize that they make more $$$ when people use their card more, but they’d lose less $$$ by not enticing 4/5ths of their customers to cut up their cards and seek credit elsewhere. Certainly Master Card, Visa, Diner’s Club and American Express all have access to the same data that Discover Card does – they can 1) verify that person X has a good creidt history, and 2) verify that they are a Discover Card member. If I were at one of those companies, I would certainly do a promo offer entitled “hey all you insulted Discover Card Members!” come check us out! We’ll offer you a card at a low interest rate under the logic that you’ll spend more having to pay less in interest and we’ll make it up that way!
I certainly am not moved to go and spend $1,000 on my card this year to get a blessing of a “real” interest rate *next* year.
Anyway I called Discover card and talked to two very VERY dense people. (One of them didn’t know the name of the CEO…) I figured it was worth a shot – I asked for the preferred rate based upon my credit history with them (I’ve had a card since 1987), and under the expectation that I was about to get a huge raise in salary which would greatly increase my discretionary funds. They felt that I should have spent more $$$ in 1992.
(Actually I did – I just went with my cheaper rate cards!)
Anyway if you HAVE a Discover Card, I suggest giving them a call and balking at their 19.8% rate – I’d also consider forwarding all the card offers you get in the mail with rates < 19.8% [I get about 2 a week] to Thomas R. Butler, President Discover Card Services… PO Box 15184, Wilmington, DE 19886-1013. Perhaps he’ll get the hint. I mean what else is the Discover Card Rebate check worth? (About $2.50/year). It’d be worth the stamps.
Me, I’m cutting up my card and mailing it in. :agree that it makes no sense to make many small charges and pay :interest on them from month to month, but some of us are not :sufficiently flush with cash to be able to pay off one or two large, :utterly necessary charges in a month.
Answer: You can get a loan from a good bank with interest rates that are significantly lower than what most credit cards offer. You can actually save money by getting a bank loan and using that money to pay off your credit card bills.
Saving just a little percentage points like this can mean a lot, ESPECIALLY if you’re low on cash. Say what?!! How are “us consumers” being taken for a ride?
Discover is a for-profit company. They’re not in business for altruistic reasons. They offer a service — a credit card. If you want to use it, you’re welcome to. If you don’t like the terms, *don’t use it*.
As for being taken for a ride: what could you possibly be referring to????
The original article pointed out that Discover had *lowered* their credit card interest rates. Is there something wrong with that?
Think of Discover credit as an unsecured personal loan.
* Is it expensive? Yes.
* Can you borrow money at lower rates? Almost certainly.
If the rates upset you, borrow elsewhere!! Don’t borrow on your credit card. No-one is putting a gun to your head and forcing you to charge things. I don’t carry balances on my credit cards, because of the high rates. But, I do find credit cards convenient, for a lot of reasons.
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