--------------------------------------------------------------------- CUT AND PASTED FROM CARD TRAK... During the first quarter NextCard posted a loss of $16.6 million compared to a loss of $17.7 million in the year-ago quarter. ----------------------------------------------------------------------------- THIS MAY BE THE ANSWER TO THE 18.99% ????
George-- No doubt you're right about Nextcard's motivation to raise rates. Based on your wife's experience, it seems that the increase has nothing to do with risk. Nextcard has a lower than average default rate and has shown phenomenal growth in the past two years but I guess it hasn't been enough to achieve economies of scale judging by its negative earnings report. My theory is that Nextcard is thinking that at least some people won't notice, or if they do, that they won't complain. I think it would be a PR nightmare for them to try across the board increases like this while they continue to advertise the 9.99 rate. I got this card in January at 0.49 over prime which over time with fed. cuts brought it down to 7.49. In May, I received notice that the APR would change to 9.99 fixed. I was not happy but I could endure that. It's still a competitive rate but if it goes up to 18.99, they will lower at back down or I'm going shopping for a card to replace it. The only reason I got the card was the low ongoing rate.
