My interest rate doubled in spite of being a regular payer for years. No reason, other than they could. I’m currently trying to find one 0 interest to get rid of the account that changed.
Most credit card rates are from 18 to 27%.
In a rational world the rate should be prime plus some kind of risk premium. The current prime rate is 3.25%. Someone in the banking industry is going to have to talk long and hard to convince me that 15 to 24% is a reasonable risk premium.
Sure, the risk premium should be higher than on a mortgage because there are more defaults on credit cards, but the premiums being charged are outrageous.
And, they smack of price-fixing. Just as an example, I have a 45 year history of paying my bills, including credit card bills on time and no one has ever lost a dime on me. Just why is my rate exactly the same as a new worker with less than 6 months experience and very little credit history? If free enterprise were really working the way the textbooks say it should, excellent credit risks should be getting credit cards with much lower interest rates, somewhere in the 10-12% range and banks should be competing for this business.