Well, of course it's not risk free. What is? HBD is paying less interest than many credit cards charge so from that perspective it doesn't seem crazy. I doubt 20% is sustainable forever but I don't know that anyone said it was. It can always be adjusted downward at a later date if this rate starts to cause issues.
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Yes credit card debt repayments is high because someone is taking the risk to offer capital for an unsecured loan! It’s to compensate for all those who don’t pay back their credit cards so while you who borrows pays high
The one holding the contract on that debt returns a much lower rate once you factor in the defaults
Changing the % just means you lose your liquidity to someone else who will offer better rates that’s the entire point of offering a higher rate you want the liquidity