Credit Card Rate/Terms - Good or Bad, how to tell?

Two or three years ago, when the Fed rate was lower, cards at purchase rates of 4% to 8% fixed APR were available to those with good credit.

As the Fed rate has risen, those offers have risen with it. In addition, some lenders have shifted from fixed rate offers to more variable offers to better hedge their interest rate risk. The variable rates can't be counted on, and in general, purchase rates are also less reliable than BT fixed til paid from a reliable lender.

One rule of thumb is that short term rates should be near "prime", or about 3% over the Fed rate, to those with good credit. There are, however, offers out there to those with very good credit at rates below prime, say 2% to 3% for balance transfers, fixed til paid, no fee.

0% for 6 months, jumping to purchase rates around 16%, are common "teaser" terms, but not worth the trouble if you really have good credit. 4% or 5%, with a 3% fee, is also no big deal, since you really paid near 8% the first year. Also be aware that the terms may appear good, even with a fee, but if the minimum payment is jacked up resulting in a faster payoff, that transfer fee that jacked up their return from the advertised "APR" only bought you a shorter term loan than some other lender's terms. It is a simpler comparison when there is no transfer fee. They can take back with one term, possibly not even disclosed, what they promise with another.

If your credit is very good, and you have a number of credit relationships, it may depend on each lender's perception of interest rates and economic risk going forward, to what degree they want to lock in some lending at low rates to low risk customers, vs. go for more higher rate but higher risk customers. In effect, they are managing an investment portfolio with a mixture of risk and return, and the optimal balance depends on how changing economic conditions affect your customers.

Some lenders make their money on the merchant fees, and not primarily on interest from carrying consumer balances, while others may accept some part of their income at moderate rates from carrying consumer balance transfers. Credit Unions tend to peg their rates to prime, with some adjustment for customer creditworthiness and risk, but less use of predatory "teaser" terms, or at least that has been my experience.

Some lenders may view you as a dumb consumer who will fall for short term teaser rates, "rewards", or promises of a good rate, but with terms allowing them to change your rate for any reason, including just wanting more profit. If you have very good credit, you will find yourself phasing these lenders out, since you can do better.

Some lenders actually prefer customers that are a little overcommitted, perhaps already paying on enough debt that they are "hooked", but who they think are otherwise good for the debt, where they can enhance profits thru some late fees and interest rate jacking.

One extreme is what Providian did before the tech crash and following recession, pursuing primarily the subprime market at higher rates, hoping their risk was covered by their higher return, resulting in large losses and write-offs when the economy slowed. They failed to diversify their risk, since changes in the same economic factors undermined the ability to pay of most of their subprime borrowers all at the same time. (In addition, they got themselves in regulatory trouble for placing "credit protection" and similar products onto consumer's bills without authorization.)

There are consumer web sites that survey and report CC rates and terms. I don't know them off the top of my head.

Presumably, if you have good credit, you are NOT looking for a predatory financial partner, but one offering fair terms near market rates.