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Very interesting : interest rates


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#1    UM-Bot

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Posted 10 June 2011 - 09:17 AM

<strong class='bbc'>Image credit: sxc.hu</strong>
Image credit: sxc.hu
Phillip Tilley: My good friend Joe is blind and has been for forty years yet he inspires me with his ability to see what many sighted people fail to.  He recently pointed out that his savings account only returns to him an interest rate of a quarter of one percent for the Bank to have use of his funds.  They loan funds to other people and charge interest on that to pay Joe his quarter percent and cover operating expenses and earn a profit as is the capitalistic way.

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#2    williegreen

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Posted 10 June 2011 - 11:17 AM

While I agree that credit cards charge too high an interest, it isn't as simple as you have made it.  The big piece you are missing is the number of defaults and late payments that take that 9000% and substantially reduce it.  So in fact you should be blaming your fellow citizens who aren't paying, they are the main reason for such high interest rates.


#3    Oen Anderson

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Posted 11 June 2011 - 03:25 AM

View Postwilliegreen, on 10 June 2011 - 11:17 AM, said:

While I agree that credit cards charge too high an interest, it isn't as simple as you have made it.  The big piece you are missing is the number of defaults and late payments that take that 9000% and substantially reduce it.  So in fact you should be blaming your fellow citizens who aren't paying, they are the main reason for such high interest rates.
You don't have to be a genius to figure lower interest rates would lead to fewer defaults and late payments.  Blame the greedy bankers.


#4    George Ford

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Posted 11 June 2011 - 09:27 AM

View Postwilliegreen, on 10 June 2011 - 11:17 AM, said:

While I agree that credit cards charge too high an interest, it isn't as simple as you have made it.  The big piece you are missing is the number of defaults and late payments that take that 9000% and substantially reduce it.  So in fact you should be blaming your fellow citizens who aren't paying, they are the main reason for such high interest rates.


But it's the banks fault for bending over backwards to lend money to anyone regardless of whether they can pay it back or not.

About 20 years ago banks would be very wary with who they leant money to, and they made good money and interest rates on savings were above 9%... But now the bank will lend a 19yr old girl with no collateral over 10000 in credit cards at 27% interest rate when she only earns 12000 a year!!

She could not keep up the 600+ monthly payments (of which a substantial amount was interest and insurance she didn't want) and still afford to live so had to default. The banks can be utterly irresponsible, small minded, bonus focused idiots. The news over the last few years is rife with stories of banks having no common sense.

I'd also like to point out that a small handful of banks have been sensible and cautious with their lending.

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#5    Torgo

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Posted 13 June 2011 - 09:06 PM

There's a reason I never don't pay off my credit card within a month, and only keep a third of my money in a financial institution.


#6    Habitat

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Posted 14 June 2011 - 07:59 AM

I suspect the average worker would be shocked to discover how much of the working week is occupied in earning to pay interest. Aside from personal debt, such as credit cards and mortgage etc, there is a lot of hidden interest charges built in to the price of goods and services, because those companies providing them typically have loan borrowings themselves. And governments with their bloated debt pay it off through inflated charges and taxes. Maybe some time Wednesday you start earning money for yourself.


#7    sher0828

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Posted 14 July 2012 - 06:46 AM

About the interest rates, I have read from an article that Interest rates are at record lows for most kinds of loans accessible in the United States, making it less expensive than
ever to borrow cash. But that is not true for all kinds of loans. A brand new report says that rates are increasing for charge cards once again.


#8    Super-Fly

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Posted 14 July 2012 - 05:10 PM

Hope it changes.

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#9    Babe Ruth

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Posted 15 July 2012 - 01:01 PM

As Paul Craig Roberts points out, this is connected to the manipulation of LIBOR, the current and legitimate scandal in the banking industry.

It no longer pays to save money, because the interestest paid is so low.


#10    lightly

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Posted 17 July 2012 - 12:27 PM

Banks used to pay a decent interest rate on accounts to encourage people to put money in their bank.. so they could loan it out at a HIGHER interest rate.     Direct deposit practices have eliminated the need for banks to offer encouraging interest rates.      Social Security Retirement  checks now get deposited directly .    That is a huge (federally mandated) gain for banks.
       CD's ( certificates of deposit )  were paying 7-8-9 %  in the 70's  ....   about 4-5 %  in the 90's ....   Now most earn  less than 1%.      I remember when savings accounts paid 3 to 5%   ... mine now pays   about 15 one hundredths of one percent!

Important:  The above may contain errors, inaccuracies, omissions, and other limitations.

#11    Super-Fly

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Posted 17 July 2012 - 04:57 PM

I spend my queen heads when i get it.

No time for saving!

But like i said, i do hope it all changes.

Thanks,

Edited by Super-Fly, 17 July 2012 - 04:59 PM.

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