Credit Card Poll - Type, how you use, APR

[dietcoke]

We have a Chase Freedom credit card we only use for travel and online purchases. We have a $25,000 limit and carry a balance of between $1-$2,000 on it most of the time. I pay $1-$2,000 monthly but we continually use it if that makes sense. Anyway, I just realized our APR is 16%, which I think is ridiculous. Or is that normal? Just curious what others are paying and if we can negotiate that down? Or am I doing something wrong by not literally having a zero balance on it?

Thoughts, suggestions, commiseration? TIA

[Susie]

I think that % APR sounds pretty normal.  Credit card interest rates are ungodly high.  I don't actually know what any of ours are though, because I don't pay interest.  I pay the statement balance in full every month, so no interest is applied.  For that reason, I'd rather have a card with good rewards than a low interest rate; the interest rate only matters if you're paying any.  I pretty much never actually have a $0 balance because when I pay the statement balance, there is card activity since the statement that isn't billed to me yet (it will be the following month) but it isn't accruing interest until after the date on which payment for those charges is due.  That's why it's called revolving credit.

I use my credit cards for everything I possibly can.  Why not, it's free use of the money for the month, I get rewards for every dollar I spend, and it's better fraud protection than any other payment type.  As long as you keep your spending in check and you're able to pay the statement balance in full every month, it's a great tool.

Our primary card is a Chase Sapphire Preferred, which has an annual fee but I deem it worth it because the rewards are good.  We also have a few other cards with $0 annual fees that I keep for other reasons:  Chase Freedom is my oldest account, LLBean MasterCard gets me free shipping and monogramming when I shop there, and a Macy's card gets me some better sales on the infrequent occasion that I shop there.  Across all my cards, I'm using about 6% of my available credit according to Credit Karma.

[kadams767]

Sept 27, 2019 7:53:40 GMT -5 dietcoke said:

We have a Chase Freedom credit card we only use for travel and online purchases. We have a $25,000 limit and carry a balance of between $1-$2,000 on it most of the time. I pay $1-$2,000 monthly but we continually use it if that makes sense. Anyway, I just realized our APR is 16%, which I think is ridiculous. Or is that normal? Just curious what others are paying and if we can negotiate that down? Or am I doing something wrong by not literally having a zero balance on it?

Thoughts, suggestions, commiseration? TIA

I can't really tell if you are actually carrying a balance, though.  I continually use my cards, so the balance is never actually zero, but I pay each monthly statement balance in full so I am not charged interest.  Because the statement balance is paid in arrears though (ie. I have a bill due October 1st, it's for charges I made in August-September), there are charges that remain on the card that I made after the billing cycle closed.  So I pay my statement balance in full, those charges made are still there for the next bill, but they aren't accruing interest.  That isn't what I consider "carrying a balance."  When I say carry a balance, I am referring to not paying the statement amounts in full each month.  Is that what you are doing?  

To actually answer your question, though, that rate seems normal to me.  Credit card interest is very high.  If you are truly carrying a balance every single month and getting charged interest, then yes, I would try to pay it off as soon as possible, or see if you could lower your rate.  But if you aren't getting charged interest, I wouldn't worry about it.  I use my cards similar to how Susie described, and I choose the card  based on the benefits, not interest rate.  

[maddiepaddy]

Are you actually being charged interest? 16% seems normal to me - but it shouldn’t matter unless you’re actually carrying a balance (ie, not paying the bill in full each month).

I use a Chase Sapphire Reserve, Hilton Amex something or other, and a Chase Freedom. I don’t even know what my interest rates are on any of them because I always pay in full. I’m just here for the points

[ohgillian]

Sept 27, 2019 8:40:54 GMT -5 Susie said:

I think that % APR sounds pretty normal.  Credit card interest rates are ungodly high.  I don't actually know what any of ours are though, because I don't pay interest.  I pay the statement balance in full every month, so no interest is applied.  For that reason, I'd rather have a card with good rewards than a low interest rate; the interest rate only matters if you're paying any.  I pretty much never actually have a $0 balance because when I pay the statement balance, there is card activity since the statement that isn't billed to me yet (it will be the following month) but it isn't accruing interest until after the date on which payment for those charges is due.  That's why it's called revolving credit.

I use my credit cards for everything I possibly can.  Why not, it's free use of the money for the month, I get rewards for every dollar I spend, and it's better fraud protection than any other payment type.  As long as you keep your spending in check and you're able to pay the statement balance in full every month, it's a great tool.

Our primary card is a Chase Sapphire Preferred, which has an annual fee but I deem it worth it because the rewards are good.  We also have a few other cards with $0 annual fees that I keep for other reasons:  Chase Freedom is my oldest account, LLBean MasterCard gets me free shipping and monogramming when I shop there, and a Macy's card gets me some better sales on the infrequent occasion that I shop there.  Across all my cards, I'm using about 6% of my available credit according to Credit Karma.

This is us. I have no idea what our APRs are; we use the cards heavily for everything we possibly can, and we target certain expenditures with certain cards, but everything gets paid off monthly. 

Current cards are:

Chase Sapphire Reserve
Cap One Savor (I'll be cancelling at year's end)
Two Amex Blue Cash Everyday - one just got an offer to re-upgrade to BCP so I'll probably do that shortly.
The Amazon Chase card, which I only use at Amazon and Whole Foods
The Target Credit Card 
A Hilton Amex - I think maybe the Surpass? I just recently earned the SUB for that one so I'll downgrade it in about 10ish months.
Citi Double Cash Back, which is my baseline card unless I'm working on a SUB (sign-up bonus) elsewhere.
And one or two other no AF cards that I've had for more than a decade that I just keep in rotation.

[k3am]

Pretty much what Susie, said.

We don't carry a balance, I make payments on it every week or so. I couldn't tell you any of our rates - they're ungodly high, but we don't pay interest.

I have a Discover, a Chase/Amazon Rewards, and a Citicard AmEx. We primarily use Discover for 95% of our purchases, the Amazon for online purchases, and the AmEx for places Discover isn't accepted or for any recurring charges (mostly wine clubs and the place I order lunch from.)

[jlt19]

I do the same as everyone else (use cards but pay balance off monthly). But I did just find out that my Chase SW card is 17.75% because I inquired about a 0% "transfer" offer. I put transfer in quotes because I won't transfer it to another card but to my bank account if I go through with it. And yes, 17.85 and 16% are outrageous rates, but I think fairly typical.

I have a LOT of cards as I churn them fairly regularly, but if I'm not trying to meet an amount for a new bonus, my go to is either the Chase Ink (best travel partners, IMO same as the CSP) or my Fidelity Visa which is 2% into my Fidelity account.

[wildrice]

I have a Chase Freedom and a Chase Sapphire Reserve. I use them both depending on what I buy. The Reserve is solely for travel related and dining out related expenses because I get 3 points per dollar on those, and the Freedom is for everything else because it's 1.5 points.

I always pay the balance in full so IDK what the APR is. I think it's at least 16% because unfortunately that is a very normal rate, outside of promotional rates.

You don't need to always have a zero balance on it, but you do need to pay the monthly bill in full in order to avoid interest. I have never gotten into doing weekly payments or doing payments more often than when the bill is due, so that's not necessary. I actually have mine set up on auto-pay so I pay exactly what the bill is for, on the date it is due, every month.

[puppylove64]

I think my regular cards are 16-18% but my target and Home Depot are like 26%. Credit cards have ridiculous interest rates. As long as you pay them off monthly and aren’t paying interest, who cares?

I bought a mattress a few months ago and then knew I would return it so I left the balance on my credit card for the month and got charged like $25 in interest just for the mattress charge to get refunded the next month 😫 oops, guess I played that game wrong.

[lindyanne]

If you pay the statement balance before the payment due date, you shouldn’t actually be paying interest. It doesn’t matter if you continually use it and don’t pay it down to $0.

[fryjack2]

We have a 2% cash back on everything ( 1% when you buy, 1% when you pay the bill) Citi card.

We put every single thing on it since we pay it off every month and the 2% back is free money.  I think last I looked the interest rate was 20 something. 

We are planning some $$$$$ expenses in the next year so I'm looking at opening a 0% interest for X months card so that we don't have to touch savings accounts and can pay back what we put on it at a slower pace.

[dietcoke]

Thanks all. I looked closer at my statement and have only been charged a bit of interest on some months when I didn’t pay the full balance. And that’s only because I randomly throw $ at or to come close to paying it off. I just need to be more diligent about paying the exact amounts due to avoid the interest. Thanks. In hindsight, I see this was kinda silly of me.

[niq]

We have the Alaska Airlines signature Visa, it has an interest rate in the high teens or low 20s. We pay it off in full most months, about twice a year we make a bunch of purchases and carry a balance for 2-4 months (one of those is paying for summer camps in January/February).

Our guideline is "use the card for anything that's not a regular montly budget category", so it ends up being car repairs, travel, Christmas, big one-off purchases, etc. In a typical month we put $1500-2000 on the card.

I'd say your interest rate is pretty normal.

[goldengirlz]

I don’t even know our APRs because I pay in full each month. We probably have too many cards (H and I have two joint cards, plus he has one in just his name and I have three more in just my name.) Our credit scores are in the 800s though so I guess it doesn’t matter.

We charge almost everything we can for points, and use each card based on its rewards categories. It seems like there’s an inverse relationship between APRs and rewards. Since we pay our statements in full, I’d rather have the rewards than zero interest.

[aspentosh]

We have a few and honestly I have no idea what the APR is on any of them because we pay them off in full (so statement balance gets paid though we never have a $0 balance). I think they are mostly in the 12-18% range.

Target CC I use at Target, obviously.
Costco VISA I use for gas and groceries because they are the best %age back for those categories.
Amex for everything else (shopping and stuff but not mortgage or utilities).

But like I said, we pay off all three every month.

[azalea]

Sept 28, 2019 8:26:23 GMT -5 dietcoke said:

Thanks all. I looked closer at my statement and have only been charged a bit of interest on some months when I didn’t pay the full balance. And that’s only because I randomly throw $ at or to come close to paying it off. I just need to be more diligent about paying the exact amounts due to avoid the interest. Thanks. In hindsight, I see this was kinda silly of me.

Can you set up your credit card account to automatically "pay in full" each month? That will automate the process and ensure you don't pay interest. This is how our account is set up. We keep extra buffer in our checking account to ensure it can cover the amounts that are auto deducted each month.

[sillygoosegirl]

Oct 2, 2019 11:13:39 GMT -5 azalea said:

Sept 28, 2019 8:26:23 GMT -5 dietcoke said:

Thanks all. I looked closer at my statement and have only been charged a bit of interest on some months when I didn’t pay the full balance. And that’s only because I randomly throw $ at or to come close to paying it off. I just need to be more diligent about paying the exact amounts due to avoid the interest. Thanks. In hindsight, I see this was kinda silly of me.

Can you set up your credit card account to automatically "pay in full" each month? That will automate the process and ensure you don't pay interest. This is how our account is set up. We keep extra buffer in our checking account to ensure it can cover the amounts that are auto deducted each month.

This is what we do too, although that only works if you can definitely afford to pay off the balance in full each month. If you can't, bounced check and overdraw fees could easily cost more than a high interest rate on a small balance carried over...