From: Robert J. Bradbury (bradbury@www.aeiveos.com)
Date: Sun Dec 05 1999 - 11:39:17 MST
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?
Robert
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