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They are offering bad rates to people with poor credit because it's more of a risk, people will build up a more reputable credit rating over time with these poor rates and they'll then qualify for the better APR deals later in life when they've proven they can manage repayments. The card provider is taking a bigger risk so it makes sense there should be more reward.

I see absolutely no issue with it.
 
It seems you have never seen a payday loan APR which is often above 1000%.

Definitely think these shouldn't be allowed.
 
Well I guess the alternative is that people with a poor/no credit history have no opportunity to build up a better profile since it is not financially viable for anyone to lend to them?
 
kayomani said:
40% APR is nothing compared to those payday loan companies, try 2500% :/
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Whilst true, they generally last 7-30 days or so. Whilst credit card debt is often used by people as longer term credit.

Even with a lower APR you could end up losing more money.

I cringe at some car financing which at rates of like 10%+ APR can end up costing a horrific amount.
 
I think most credit card interest rates are outrageous but then again they don't really matter to me as I'm not going to use one to borrow beyond the interest free period each month.

Even a regular card is going to have sufficient numpties who get themselves into trouble that they need to ramp up rates a bit compared with a regular loan. Stuff like the Vanquish is aimed at people who are already considered to be a bigger risk to begin with... perhaps through having a low income and no credit history or perhaps because they've been rather silly before with regular credit cards.
 
The best sub prime card for bad credit is Tesco’s foundation card. It’s a respectable 24% for purchases and balance transfers. Minimum repayments are £25 a month, so it’s easy to stay on top of things rather than getting away with a few quid a month and having ridiculous interest build up.
 
Kermit said:
I've seen and noticed the payday loans and would have mentioned them but its the credit card 40% that prompted this thread as in my mind credit cards traditionally have been something you'd only get if you already had a good credit rating. That said, my credit rating should be sky high but on the noodle credit rating scale iirc I sit just slightly above average despite never having missing a loan payment (had 6-9 £2000-12000 loans in the past), never missed a paying any bill, fully paid off mortgage never missed a payment, one small slip 20 years ago ending a Celnet mobile contract and owing £12 which I paid eventually - Its a nice place to be and although I'm not wealthy by any means I do wonder why my credit rating (at least on noodles free check) isn't something like 900/999 rather than 600/999

I just seems like credit ratings have gone crazy and that now days (instead of 15/20 years ago) to get a good credit rating, you have to be in debt and constantly keep up payments.
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Does your credit rating stop you getting credit though? If no, ignore what the ratings agency tells you (within reason) as each lender uses their own criteria.
 
dowie said:
I think most credit card interest rates are outrageous but then again they don't really matter to me as I'm not going to use one to borrow beyond the interest free period each month.
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Pretty much.

I mean, so what if the interest is 40%?

You only run into it because you didn't pay them back their money as agreed.

If you use it responsibly and not as an extension beyond your means it costs nothing.
 
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