Subnostr

I'm surprised these 0℅ APR guaranteed for 15+ months credit cards are still on the market. Still, dozens; every single bank or cc company.

How can it be cashflow positive for them? They have to end up with +5% each year to justify it. Arguably at least +6-7% accounting for the administration cost.

Given the average APR on the actual balance then is around 23%, they have to estimate that +40% of customers fail to repay the balances on these in the intro 15month period and will be able to keep paying the 23% for at least they year.

Sounds like a big gamble to me, and something doesn't add up.

What am I missing?

Jacob (Organix Farms) 2y ago

It works out well for financially smart people. The problem is most people aren’t and fall victim to the quick satisfaction a CC brings.

I used my CC with 0% for 12mo to pay for a $5k truck years ago that no bank would provide lending. I made myself pay off that CC balance (over the monthly minimum) before the rate went back up. Finished the payments with $0 lending fees plus got $500 cash back from card promo. Most would’ve paid the minimum CC payment for the next 10yrs.

They play the odds because the odds are in their favor.

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Discussion

Mark Camper 2y ago

Yea, they keep approving me for all these; plenty of 0-3% balance transfers available too. So that you can literally play this no payment game for years if you maintain positive cashflow. The finance math isn't even that complicated here...

I just feel disgusted that they make me feel like I am the goverment here, and we all know who's gonna have to pay for all this game again.