why are credit card rates double from 7 yrs ago?

why are credit card rates like double now then what they were 7 years ago. For example all my cards were about 5-6% in 2006 when the prime rate was 7%. Now the best i can do is 11-12% and the prime rate is 3%. My credit rating has not changed. Why are the banks more greedy when interest rates for “them” are down?

By | 2013-08-26T17:18:52+00:00 August 26th, 2013|Mortgages Home Loans Interest Rate|3 Comments

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3 Comments

  1. AJ August 26, 2013 at 7:01 PM - Reply

    This is a complicated function largely based on expectations about credit in the short and long run, as well as regulatory burdens, and social implications.

    Continuing trade deficits in the US combined with the Global recession, and the EU crisis means that American dollars may become more scarce as a means of currency reserve assets. Inflationary fears are also evinced by this – the nominal rate-inflation rate equals the real rate (what investors really earn after inflation erodes value).

    The last couple of years rates have been at historic lows for the US (although they are typical for countries such as Japan) as the Fed used monetary and fiscal policy in an attempt to bolster the economy in the wake of the mortgage crisis. The effectiveness of these plans have reached terminal velocity – and we are likely to see more problems and another recession over the next couple of years due to TARP. While TARP IS A FAILING PROGRAM FOR MOST, it did work for some – because it was an ARM. Credit is not going to liquify fast enough, and rates are going to climb again back to ‘real’ levels (rates are normally much higher) – and as they do, more people are likely to go into default due to climbing rates. This affects the forward exchange market and rates now as companies hedge risk from borrowing through higher rates.

  2. Go with the flow August 26, 2013 at 6:42 PM - Reply

    Mine are lower.
    Interest rates have dropped sharply in the past few years.

    Why are you paying interest on credit cards?
    Just pay in full each month.
    That way you avoid interest and develop great credit.

  3. falsi fiable August 26, 2013 at 5:48 PM - Reply

    Untrue!

    Credit cards have been charging 18 to 29% for a long time.

    Don’t like interest? Payoff your entire balance before its due date and you get free use of money for up to 50 days! Your choice!

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