Bad Credit Card

lookout123 · 09-12-2007, 01:47 PM

you're absolutely right bruce, i guess i forgot to mention that no one needs to step into that card you described. it is predatory and should be shot down. there are plenty that will start you with a $500 limit and a $59 annual fee. Rates are high, usually prime + 12% or so, but they are justifiable do to the poor credit.

and believe it or not, the rates that are set are based on simple models of expected delinquencies. the folks who make their payments with high rates are covering the debt for those that refuse to pay. Risk/reward model for the company. The only way the company makes more money than they planned is if more people pay their bills than the model predicted. that rarely happens though because those models are pretty damn good.

09-12-2007, 01:47 PM	#16
lookout123 changed his status to single Join Date: Apr 2004 Location: Right behind you. No, the other side. Posts: 10,308	you're absolutely right bruce, i guess i forgot to mention that no one needs to step into that card you described. it is predatory and should be shot down. there are plenty that will start you with a $500 limit and a $59 annual fee. Rates are high, usually prime + 12% or so, but they are justifiable do to the poor credit. and believe it or not, the rates that are set are based on simple models of expected delinquencies. the folks who make their payments with high rates are covering the debt for those that refuse to pay. Risk/reward model for the company. The only way the company makes more money than they planned is if more people pay their bills than the model predicted. that rarely happens though because those models are pretty damn good. __________________ Getting knocked down is no sin, it's not getting back up that's the sin

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